Overview
- Starting Wednesday, July 1, the Education Department will begin sending 90-day notices to roughly 7–7.5 million borrowers who were on the SAVE plan and require those borrowers to select a new repayment option or be moved onto a Tiered Standard schedule.
- New borrowers and loans reconsolidated on or after July 1 will generally have only two repayment plans to choose from: a Tiered Standard fixed‑payment plan and a new income‑driven Repayment Assistance Plan (RAP).
- RAP ties monthly payments to adjusted gross income (roughly 1–10% depending on earnings), waives interest that exceeds on‑time payments for low‑payers, and leaves remaining balances eligible for forgiveness after 30 years.
- The law imposes new borrowing caps for loans disbursed on or after July 1, including $20,500 per year and $100,000 lifetime for most graduate students, $50,000 per year and $200,000 lifetime for many professional programs, and $20,000 per year with a $65,000 lifetime cap for Parent PLUS loans.
- Implementation is unsettled by multiple court challenges over program definitions and by servicer and tool reliability problems, so borrowers should confirm contact details with their servicer, review options on StudentAid.gov, and act quickly if they may need to consolidate or choose a plan.