{"id":1190,"date":"2026-07-01T16:15:25","date_gmt":"2026-07-01T16:15:25","guid":{"rendered":"https:\/\/coasttocoastmoverss.com\/?p=1190"},"modified":"2026-07-01T16:15:25","modified_gmt":"2026-07-01T16:15:25","slug":"what-to-know-as-student-loan-changes-take-effect-today","status":"publish","type":"post","link":"https:\/\/coasttocoastmoverss.com\/?p=1190","title":{"rendered":"What To Know As Student Loan Changes Take Effect Today"},"content":{"rendered":"
\n

How Can Borrowers Now Pay Back Their Loans?<\/h2>\n

Borrowers who take out new loans as of Wednesday will be limited to the standard repayment plan or RAP<\/u>. The standard repayment plan will give borrowers a set amount they have to pay each month, dividing how much they owe by the time period they have to pay it off. Loans of up to $25,000 will be paid over the course of 10 years, loans of up to $50,000 will be paid over 15 years, loans of up to $100,000 will be paid over 20 years and loans over that amount will be spread out over 25 years. Under RAP, borrowers will make their monthly payments based on income, replacing current income-based repayment plans. Borrowers pay rates based on their annual income (including their spouse\u2019s income), which ranges from $120 per year for those making less than $10,000 (divided up into $10 monthly payments) to 10% of gross annual income for those making over $100,000. Unlike previous income-based plans, RAP allows borrowers\u2019 remaining loans to be forgiven after 30 years of making payments\u2014up from 20 or 25 years under current plans\u2014and has a minimum payment of $10 each month, while low-income borrowers have been able to qualify for $0 repayments. <\/p>\n

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How Can Existing Borrowers Pay Back Their Loans?<\/h2>\n

Existing borrowers who took out loans before Wednesday can change to the new plans if they want, but otherwise shouldn\u2019t be impacted by the new changes. Some of those existing plans\u2014including Pay As You Earn, or PAYE, and the Income-Contingent Repayment plan, or ICR\u2014will be phased out<\/u> in July 2028 though, so borrowers would have to switch at that point. Borrowers on the SAVE plan are the exception here and will have to switch to one of the new repayment plans within 90 days, or else they\u2019ll be automatically enrolled in a new plan. <\/p>\n

What New Caps Are There On Student Loans?<\/h2>\n

The spending bill got rid of former Grad PLUS loans, which did not have a limit, and established new caps<\/u> on graduate school loans. Borrowers enrolled in professional programs, like medical school, can take out federal loans of up to $50,000 per year, or $200,000 in total, while those in other graduate programs can borrow up to $20,500 per year or $100,000 altogether. The Trump administration issued an updated list<\/u> of programs that qualify for the higher \u201cprofessional\u201d cap after students in nursing and other degree programs sued over not being eligible for the higher amount, and a federal judge issued a preliminary ruling<\/u> in their favor last week. The litigation is still moving forward, though, so it\u2019s possible the government could narrow the list of programs again if it ultimately wins in court. Beyond graduate school, Parent PLUS loans that parents take out for their dependents are now capped at $20,000 annually per student, or $65,000 in total. There are no caps for undergraduate loans, but all borrowers are now limited to taking out no more than $257,500 in federal student loans over their lifetime. Parents taking out loans for dependents are exempt from that cap, as well as borrowers who have already taken out Grad PLUS loans.<\/p>\n

<\/div>\n

What Other Changes Are Taking Place?<\/h2>\n

The \u201cOne Big Beautiful Bill\u201d Act also made changes to Pell Grants, establishing new grants<\/u> for certain short-term programs and closing a loophole that previously allowed some students with large assets but low income to qualify for Pell Grants. Students will now be disqualified from Pell Grants if their student aid index\u2014a number<\/u> demonstrating a student\u2019s financial need, based on their families\u2019 financial resources and expenses\u2014is at least twice the maximum Pell Grant given that year. Other changes going into effect include now allowing borrowers to rehabilitate their loans twice, rather than once, and limiting when loans can be in forbearance. Under the new terms, loans can\u2019t be in forbearance\u2014meaning temporarily paused\u2014for more than nine months during any 24-month period. The spending bill also got rid of previous rules that allowed borrowers to have their loans temporarily deferred due to unemployment or economic hardship.<\/p>\n

Interest Rate Cut For Auto-Pay Borrowers: What To Know<\/h2>\n

Separate from last year\u2019s spending bill, the Education Department announced<\/u> in June a temporary 1% interest rate cut will take effect starting Wednesday for borrowers who use auto-pay to pay back their loans. Auto-pay means borrowers automatically make their student loan payments each month, with money being deducted from their bank accounts without them having to take any action. People who use auto-pay will get the rate cut automatically without having to do anything, and borrowers who aren\u2019t already enrolled in auto-pay will be able to take advantage of the discount as long as they enroll in auto-pay by Sept. 30. The rate cut will be in effect through June 2028 and apply to all borrowers making automatic payments. Borrowers who have defaulted on their loans, or are on the SAVE plan and have to switch to a new repayment plan, will have to apply for a new repayment plan before they can enroll in auto-pay. <\/p>\n

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Tangent<\/h2>\n

In addition to the changes to student loans and repayment plans, President Donald Trump also signed an executive order restricting the Public Service Loan Forgiveness program. The restrictions would prohibit employees who work for nonprofits that aren\u2019t in line with the president\u2019s policy agenda from receiving forgiveness under the plan, which forgives a borrowers\u2019 loans after 10 years of public service in the public sector or for a nonprofit. That order is now on hold, however, after a federal judge blocked<\/u> the policy earlier this week. The litigation is still moving forward and the Trump administration will likely appeal that ruling, though, so it\u2019s possible the restrictions could still take effect in the future.<\/p>\n

Key Background<\/h2>\n

Student loans have become a major political issue in recent years, with more than 42 million people nationwide having some kind of federal student debt. The Biden administration sought to provide widespread debt relief, making a number of incremental measures to reduce borrowers\u2019 debt even as its more sweeping effort got overturned at the Supreme Court. The Trump administration has taken a much different approach, however, with Education Secretary Linda McMahon saying<\/u> last year, \u201cAmerican taxpayers will no longer be forced to serve as collateral for irresponsible student loan policies.\u201d In addition to the changes through the Big Beautiful Bill, the Trump administration also resumed debt collections<\/u> on defaulted student loans in May 2025 after they had been paused amid the COVID-19 pandemic. That move has been expected to impact millions of borrowers, though the Education Department said<\/u> in January it would delay \u201cinvoluntary\u201d steps to collect on student loans\u2014like by garnishing workers\u2019 wages\u2014while the new changes to the student loan program are being implemented.<\/p>\n

Further Reading<\/h2>\n

Government Cuts Student Loan Interest By 1% If Borrowers Use Auto-Pay<\/u> (Forbes)<\/p>\n

How Trump\u2019s Spending Bill Will Impact Your Student Loans\u2014As It Heads To President For Signature<\/u> (Forbes)<\/p>\n

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Trump\u2019s \u201cOne Big Beautiful Bill\u201d imposed a number of new student loan changes that kicked in on July 1.<\/p>\n","protected":false},"author":1,"featured_media":1189,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[3],"tags":[],"class_list":["post-1190","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-business"],"yoast_head":"\nWhat To Know As Student Loan Changes Take Effect Today - Coast to Coast Movers<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/coasttocoastmoverss.com\/?p=1190\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"What To Know As Student Loan Changes Take Effect Today - Coast to Coast Movers\" \/>\n<meta property=\"og:description\" content=\"Trump\u2019s \u201cOne Big Beautiful Bill\u201d imposed a number of new student loan changes that kicked in on July 1.\" \/>\n<meta property=\"og:url\" content=\"https:\/\/coasttocoastmoverss.com\/?p=1190\" \/>\n<meta property=\"og:site_name\" content=\"Coast to Coast Movers\" \/>\n<meta property=\"article:published_time\" content=\"2026-07-01T16:15:25+00:00\" \/>\n<meta name=\"author\" content=\"admin\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"admin\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"6 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\\\/\\\/schema.org\",\"@graph\":[{\"@type\":\"Article\",\"@id\":\"https:\\\/\\\/coasttocoastmoverss.com\\\/?p=1190#article\",\"isPartOf\":{\"@id\":\"https:\\\/\\\/coasttocoastmoverss.com\\\/?p=1190\"},\"author\":{\"name\":\"admin\",\"@id\":\"https:\\\/\\\/coasttocoastmoverss.com\\\/#\\\/schema\\\/person\\\/266a8d2ebdac9f8b4354d52dead7fa6b\"},\"headline\":\"What To Know As Student Loan Changes Take Effect Today\",\"datePublished\":\"2026-07-01T16:15:25+00:00\",\"mainEntityOfPage\":{\"@id\":\"https:\\\/\\\/coasttocoastmoverss.com\\\/?p=1190\"},\"wordCount\":1200,\"commentCount\":0,\"image\":{\"@id\":\"https:\\\/\\\/coasttocoastmoverss.com\\\/?p=1190#primaryimage\"},\"thumbnailUrl\":\"https:\\\/\\\/coasttocoastmoverss.com\\\/wp-content\\\/uploads\\\/2026\\\/07\\\/35fff6905c9b07e89cebe95fec25d02b.webp\",\"articleSection\":[\"Business\"],\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"CommentAction\",\"name\":\"Comment\",\"target\":[\"https:\\\/\\\/coasttocoastmoverss.com\\\/?p=1190#respond\"]}]},{\"@type\":\"WebPage\",\"@id\":\"https:\\\/\\\/coasttocoastmoverss.com\\\/?p=1190\",\"url\":\"https:\\\/\\\/coasttocoastmoverss.com\\\/?p=1190\",\"name\":\"What To Know As Student Loan Changes Take Effect Today - 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