Federal Student Loan Repayment Rules Shift on July 1

Why it matters locally: With approximately 2 million New York residents holding federal student loans, the SAVE plan closure and new repayment options will affect borrowers across the state seeking to manage debt through income-driven repayment strategies.

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Federal student loan borrowers will encounter three major changes beginning July 1, affecting how they repay loans and what they can borrow. The SAVE repayment plan, which has drawn borrowers seeking lower monthly payments, will no longer accept new enrollees after June 30. Existing SAVE participants will keep their current plan. Two new repayment options will launch on July 1 to replace SAVE. The Department of Education designed the new plans to offer borrowers alternatives for managing their debt. Federal loan limits are shifting as well. Undergraduate borrowers will see changes to how much they can borrow annually and over their academic careers. Graduate and professional students face separate adjustments to their borrowing caps. Borrowers currently on other repayment plans are not required to switch. The changes primarily affect those seeking new enrollment options or students entering the federal loan system. The adjustments represent the latest revision to federal student loan rules under the Biden administration's broader effort to reshape the borrowing and repayment landscape.