Essential Tips for Student Loan Borrowers Ahead of July Changes

WHO:

Yahoo Finance - More than 43 million people owe $1.6 trillion in federal student loans.

Forbes - U.S. President Donald Trump signed the One Big Beautiful Bill Act into law.

WHAT:

Yahoo Finance - New borrowing limits and repayment options are being instituted for federal student loans.

Yahoo Finance - The Saving on a Valuable Education (SAVE) plan has been terminated, affecting over 7 million borrowers.

Yahoo Finance - Two repayment plans, Income-Contingent Repayment (ICR) and Pay As You Earn (PAYE), are being phased out by July 1, 2028.

Yahoo Finance - New Parent PLUS loans will have a maximum borrowing limit of $20,000 per year per student, or up to $65,000 per student in a parent's lifetime.

Yahoo Finance - Graduate student loans will be limited to $20,500 annually, with a lifetime total of $100,000.

Yahoo Finance - Professional student loans will have a $50,000 limit, with a lifetime total of $200,000.

Yahoo Finance - Deferment and forbearance programs for loans initiated on or after July 1, 2027, are being eliminated.

Forbes - The Education Department updated guidance on federal student loan programs in advance of changes set to take effect.

WHERE:

Forbes - The updates were announced by the Education Department in Washington, DC.

WHEN:

Yahoo Finance - New borrowing limits and repayment guidelines take effect on July 1, 2026.

Yahoo Finance - Borrowers must choose a new repayment plan within 90 days after the termination of the SAVE plan.

Yahoo Finance - Parent Direct PLUS loans must be restructured into a Direct Consolidation Loan before July 1, 2026.

Yahoo Finance - Existing Parent PLUS loans initiated before July 1, 2026, may remain on the current plan until moved by the loan servicer by July 1, 2028.

WHY:

Yahoo Finance - Changes are being made to ensure certain benefits remain intact for Parent PLUS loans and to clarify repayment options for borrowers.

HOW:

Yahoo Finance - Borrowers who do not consolidate Parent PLUS loans before the deadline will only have access to standard repayment plans.

Forbes - Payments made under the new Repayment Assistance Plan (RAP) will not count toward student loan forgiveness under other IDR plans.

(UPDATED June 10, 2026 01:48 UTC)

President Trump has signed the One Big Beautiful Bill Act into law, which comes as over 43 million people owe a staggering $1.6 trillion in federal student loans. The Education Department has announced significant updates to federal student loan programs, including new borrowing limits and repayment options that will take effect on July 1, 2026, while the Saving on a Valuable Education plan has been terminated, impacting more than 7 million borrowers. Under the new guidelines, Parent PLUS loans will have a maximum borrowing limit of $20,000 per year per student, and existing loans initiated before July 1, 2026, can remain on their current plan until moved by the loan servicer by July 1, 2028.