If you have student loans, you may want to familiarize yourself with the changes that go into effect in July. These changes can be hard to understand how they will affect your loans, but you can get advice from Your Money Line by calling 833‐890‐4077 to talk to a coach. This service is free program of the Clergy and Church Financial Ministry.
The changes introduce strict borrowing limits, eliminate Graduate PLUS loans, and introduce just two repayment options for new loans. Here’s a summary of the changes:
Borrowing Limits & Caps
- Graduate & Professional Students: Graduate PLUS loans are completely eliminated. Graduate Unsubsidized loans are capped at $20,500 per year (lifetime limit of $100,000). Eligible professional students are limited to $50,000 per year (lifetime limit of $200,000).
- Parent PLUS Loans: Borrowing is now capped at $20,000 per year and $65,000 total per student.
- Part-time Students: Federal loan eligibility is reduced for students enrolled less than full-time.
New Repayment Plans
For any new loans disbursed on or after July 1, 2026, borrowers are restricted to just two repayment options, completely phasing out legacy plans like SAVE, PAYE, and ICR for new borrowers:
- Repayment Assistance Plan (RAP): An income-driven plan where payments range from 1% to 10% of adjusted gross income, with a minimum $10 monthly payment. It waives certain uncovered interest and reduces principal by up to $50 monthly. Any remaining balance is forgiven after 30 years.
- Tiered Standard Plan: Fixed payments spread over a term based on the total loan balance (ranging from 10 to 25 years).