Now that numerous federal student loan changes have taken effect, observers are turning their attention to how those changes will impact borrowers and schools.
President Donald Trump’s overhaul of federal student loans alters how borrowers repay their loans and limits how much students can borrow for college. Meanwhile, the most generous repayment plan was eliminated in a settlement deal, meaning millions are now on the clock to choose a new — likely pricier — plan.
U.S. News & World Report asked top student loan experts what they’re watching to get a sense of how the many changes might affect the student loan landscape. Here’s what they said.
Will SAVE Borrowers Fall Behind on Payments?
Perhaps the most scrutinized development will be what happens to the roughly 7 million borrowers previously on the now-defunct Saving on a Valuable Education, or SAVE, repayment plan. Those borrowers, most of whom haven’t made a student loan payment in years, must now select a new repayment plan. Many will face significantly higher payments.
Experts generally expect delinquencies and defaults to rise during the next year as a portion of those borrowers struggle to pay. Your student loans are delinquent once you miss a payment, and they are considered in default after 270 days.
“What we’ll be paying keen attention to are those warning signs that we’re seeing delinquency go up, that repayment rates are down, and ultimately what’s going on with default rates,” says Jessica Thompson, executive vice president of The Institute for College Access & Success.
Thompson and others may have to wait a while before they get a clear sense of how SAVE borrowers are handling their payments. The Education Department releases quarterly data that highlights delinquencies and defaults, but the next report only covers activity through June 30, before any borrowers were required to transition to a new plan. And because loan servicers are reaching out to borrowers in waves, some likely won’t actually have to switch until early 2027. That means the earliest many could default is next summer, while the last borrowers to transition likely couldn’t default until almost 2028.
“I wouldn’t expect to see the full impact of these borrowers switching repayment plans until sometime in the middle of next year,” says Mark Kantrowitz, a student loans expert and author of “How to Appeal for More College Financial Aid.”
[Read: Best Private Student Loans.]
How Many People Will Accidentally Miss a Payment?
We’ve all forgotten to pay a bill at some time in our life. Maybe you never received it in the first place. Or it simply slipped your mind.
The Education Department reports the number of borrowers in various stages of delinquency, so experts say they’ll be watching coming data releases to see if waves of borrowers move together from early to later stages.
But they caution that a spike in early stage delinquencies could be partly a result of borrowers forgetting to switch plans or failing to receive proper notice from servicers. Once those borrowers become aware of the situation, they may take action and get back on track.
“I think delinquencies will come from borrowers who simply didn’t get adequate notice, had life happen, and fell behind,” says Stanley Tate, a Missouri-based lawyer who specializes in student loans. “That’s a communication and servicing problem, not a willingness-to-pay problem.”
Tate says he also anticipates a rise in defaults.
Parent Trap: Will Borrowers Get ‘Tripped Up’ by New Rules?
Previously, if you took out federal Parent PLUS loans to help pay for your child’s education, you could qualify for income-driven repayment plans and loan forgiveness by consolidating your loans. That backdoor to more affordable plans closed on July 1, 2026, as part of the student loan overhaul.
Some parents hurried to consolidate before the buzzer, and many others had already done so in previous years. But just because you’re on an affordable plan doesn’t mean you’ll stay on it. If a parent takes out any new student loan from this point forward, their old loans will be bumped off the income-driven plan and shifted into a standard plan. That mistake could jeopardize your plans for pursuing loan forgiveness and would likely result in a surge on your monthly bill.
Parent PLUS loans come with a higher interest rate than loans taken out by students, so a standard repayment plan can be particularly expensive. For the 2026-27 year, parents get an interest rate of 9.07%.
“A parent who consolidated for a first child and then takes out a new Parent PLUS loan for a second child may have lost the very benefit they were rushing to protect,” says Tate.
Experts say there likely won’t be any data that shows a clear indication of this occurring, but they’ll be watching for anecdotal evidence.
“What I’m tracking is our own intake volume and what borrowers are self-reporting when they contact us, combined with what’s showing up on Reddit and other borrower forums,” says Tate. “Those tend to be leading indicators of where the pressure is building before it shows up in official data.”
[Read: Best Student Loan Refinance Lenders.]
Will Colleges Actually Lower Costs?
The Trump administration says one of its main objectives in imposing borrowing limits is to force colleges to lower prices. The theory is that uncapped federal borrowing, especially for graduate programs, has allowed schools to charge students more than they should for a degree.
“The whole purpose of these loan limits is to put downward pressure on institutions to lower the cost of attendance,” Education Under Secretary Nicholas Kent said in a recent interview on The College Investor Audio Show.
Most graduate students will now be limited to borrowing $20,500 annually and $100,000 in aggregate. Those pursuing professional degrees such as law and medicine have caps of $50,000 per year and $200,000 total.
A few colleges have already announced tuition cuts or other measures to make programs more affordable, but researchers will be watching to see if prices will fall on a more widespread scale.
“I’m interested in seeing whether we do see any movement there,” says Jordan Matsudaira, a professor of economics and public policy at American University and the director of the PEER Center, a research hub based at the university. “There’s been some reporting on a handful of institutions that say they’ve been reducing their prices or creating scholarship programs to help students with the loss of graduate PLUS eligibility, but I’m curious to see whether we really see evidence in the full set of data about any impact that these loan limits have on program prices.”
Matsudaira, who served as chief economist and deputy under secretary of the Education Department during the Biden years, says early indications of price cuts could come from major professional organizations that publish tuition costs of college programs nationwide. For example, law schools must report a slew of data — including tuition — to the American Bar Association each fall, and the ABA typically releases that data in December. Likewise, the Association of American Medical Colleges reports tuition prices of member institutions each spring.
Will Borrowing Caps Affect Enrollment?
Another potential impact of graduate student loan limits is that students may opt for more affordable colleges or programs to avoid funding gaps that would otherwise have to be filled through private lenders. Other students may forgo college altogether.
“I’m very curious to see whether we see a drop-off in enrollment,” says Matsudaira. “I think that’s probably the most significant thing to pay attention to for the impact that these loan limits have.”
Some colleges and programs may feel the impact more acutely than others.
The nonprofit National Student Clearinghouse will release its early fall enrollment data in November, and that should offer the first signs of any changes to enrollment patterns nationwide. Its final spring report comes out next summer.
Kantrowitz says that numerous factors can contribute to shifts in enrollment, so it’s difficult to tie any movement specifically to the caps.
“There are a lot of moving parts, and we’ll probably see an impact, but we won’t be able to causally link it,” says Kantrowitz.
The College Scorecard, an online tool created by the Education Department, will show program-level trends. But that data won’t be available until several cohorts of students pass through.
“I think we’re looking at years before we really see it,” says Thompson. “We’ll see borrowing volume by institution earlier, but we’re going to need to see program-level data to see the effects in different fields.”
[Read: Best Student Loans for Bad Credit. ]
How Much Will the Private Student Loan Market Grow?
New limits are likely to push many borrowers to private lenders to cover financing gaps, but observers say they’re interested to see just how much the private market grows. The market currently accounts for less than 10% of student borrowing, or about $10 billion per year.
Kantrowitz says his own analysis suggests the total volume of private student loans may grow 85% or more.
To get a sense of the demand for private loans, Thompson says she’ll be checking Enterval Analytics’ Private Student Loan Semi-Annual Report when it comes out in January to gauge the rise in new loans.
When Will the Government Seize Wages Again?
In January, the Trump administration was poised to dust off some of its sharper debt collection tools, such as garnishing wages and withholding tax refunds. In fact, it began sending notices to some defaulted borrowers before reversing course and announcing it would refrain from those methods temporarily.
But as defaults climb above 9 million, observers wonder whether — or perhaps when — those tactics will once again be employed. The government has the authority to seize up to 15% of your after-tax paycheck and direct it toward defaulted debt. It can do the same with any tax refunds. And it can continue the process until your loan balance is paid off or you’ve resolved your default status.
However, it hasn’t used these involuntary collection methods for six years. But experts say defaulted borrowers may soon face this threat. Thompson, of TICAS, says she doesn’t expect any changes on this front until after midterm elections, but she could see the tools being reinstated in early 2027.
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So Much Has Changed With Federal Student Loans ? Here’s What Experts Are Watching for Now originally appeared on usnews.com
