Overview
- The Education Department will begin implementing the package on July 1, 2026, with servicers sending SAVE notices that give roughly 7–7.5 million enrollees 90 days to pick a new plan before automatic placement.
- Borrowers who need to consolidate loans face a June 30 cutoff to preserve access to older income‑driven repayment options and Public Service Loan Forgiveness, and consolidation processed on or after July 1 will generally reclassify loans as ‘new.’
- The SAVE plan is being wound down and replaced by two options for new borrowers: the income‑linked Repayment Assistance Plan (RAP) with a 30‑year forgiveness term and a new Tiered Standard plan that bases payments on principal balance.
- New statutory caps take effect July 1 that limit Parent PLUS borrowing to $20,000 per year and $65,000 per student and cap most graduate borrowing at $20,500 per year and $100,000 lifetime, with higher limits for some professional degrees.
- Separately, the Sweet v. McMahon settlement requires final Borrower Defense notices to be issued by June 15 for about 30,000 post‑class applicants, and experts warn the reforms could raise monthly bills, strip forgiveness credit, and push some students toward private loans or foregoing advanced degrees.