Student loan changes happening now —

If you’ve been following the news lately, you know the student loan landscape feels like a moving target. With court rulings, plan name changes, and shifting deadlines, it’s enough to make anyone’s head spin. It’s unlikely to change any time soon. We’ve yet to hit July 1 and there has already been a new lawsuit filed and talk about pushing back deadlines. While 7/1 is certainly a date to watch for, the weeks following will really tell us more about what to expect moving forward.

This blog is designed to be a practical resource.. The “SAVE” plan we all became familiar with is being dismantled, and new rules are taking its place. These aren’t just minor tweaks. They affect how much you can borrow, how long you’ll pay, and how you qualify for forgiveness.

Whether you’re a current borrower or a parent looking at PLUS loans for the fall, here are the five major changes you need to know before the July 1 deadline.

1. The SAVE Plan is Officially Ending

The most significant change is the total dismantling of the SAVE (Saving on a Valuable Education) plan. Following a series of federal court challenges, the Department of Education is transitioning all 7 million enrolled borrowers off the SAVE plan starting July 1, 2026.

If you’re currently on SAVE, don’t panic, but do pay attention to your mail. You’ll receive a notice on or after July 1 informing you that you have a 90-day window to select a new repayment plan. If you don’t act, you may be automatically placed into a standard or tiered plan that could significantly increase your monthly payment.

Just as important, other older income-driven plans are also being phased out. PAYE and ICR stop accepting new enrollments on July 1, 2026, but they do not fully sunset until July 1, 2028. After that date, IBR remains the only legacy IDR option still available. That distinction matters if you’re trying to decide whether to stay on an older plan, switch plans, or borrow again before the rules change.

2. Introduction of the RAP and Tiered Standard Plans

As the SAVE plan exits, two new core repayment options are entering the spotlight:

• Repayment Assistance Plan (RAP): This is the new primary income-driven option. Your payments will be scaled between 1% and 10% of your Adjusted Gross Income (AGI). While this sounds similar to old plans, there’s a catch: forgiveness now takes 30 years, up from the 20-25 years seen in previous programs.
• Tiered Standard Plan: This is a non-income-driven option where your repayment period is based strictly on your total balance. The minimum payment is set at $50 per month, but the timeline could be shorter or longer depending on what you owe.

RAP and Spousal Income: A Big Strategic Issue for Married Borrowers

If you’re married, RAP creates a major planning issue that couples should not ignore.

• Married Filing Jointly (MFJ): Your combined household income is used to calculate the payment. If both spouses have federal student loans, the payment is prorated between you.
• Married Filing Separately (MFS): Only the borrower’s income counts. Your spouse’s income is excluded.

This can be a very big deal when one spouse has a high income and the other spouse carries most of the student loan debt. In some households, the tax filing status you choose could directly affect whether RAP is affordable or not.

3. New Lifetime Borrowing Caps

Starting July 1, 2026, the federal government is tightening the belt on how much students and parents can borrow. This is a move intended to curb rising tuition costs, but it will have an immediate impact on your “student loan solutions” strategies:

• Graduate Students: Now face a $100,000 lifetime borrowing cap.
• Professional Students: Limited to a $200,000 cap, and this is now restricted to only 11 specific programs (like Law and Medicine).
• Parent PLUS Loans: These are now capped at $65,000 per child, a massive shift from the previous “full cost of attendance” limit.

If you’re planning for future education, these caps mean you’ll need to be much more strategic about how you fund your degree.

4. The End of Interest-Free Forbearance

During the transition away from the SAVE plan, millions of borrowers were placed in interest-free forbearance. That grace period is ending. As borrowers are moved into the RAP or other plans, interest will begin accruing again. Additionally, the “on-ramp” period that protected borrowers from the worst effects of missed payments has concluded. Collection efforts on defaulted loans are restarting in full force.

However, as a sidenote — starting on July 1, 2026, the interest rate reduction for borrowers enrolled in auto pay will go from 0.25% to 1%. This reduction is a temporary benefit available through June 30, 2028. Learn more and enroll by 11:59 p.m. ET on Sept. 30, 2026.

5. Transition Rules for New Borrowers

The rules for “staying put” on your current plan have changed. If you are currently on an older plan like IBR or PAYE and you do not take out any new federal loans after July 1, 2026, you can generally stay on your existing plan.

However, the moment you take out a new loan: whether you’re returning to school or taking out a loan for a child: your entire loan portfolio will likely be moved into the new RAP or Tiered Standard framework. This makes it vital to understand your “student loan debt relief” options before you sign for new debt.

Why a Student Loan Assessment is Essential

With these changes, there is no “one-size-fits-all” answer. What worked for your neighbor two years ago might be a financial disaster for you today. At Walden Legal Solutions, we provide a comprehensive Student Loan Assessment for $165.

This isn’t a simple “sales call.” It’s a deep dive into your specific loan types, income, and long-term goals. We serve clients nationally for student loan debt solutions, helping you determine if you should switch to the RAP plan, consolidate, or even explore if Chapter 7 or Chapter 13 bankruptcy might be a tool to manage your overall debt load.

How We Can Help

• National Reach: While we are based in Lenexa, Kansas, we handle student loan assessments for borrowers across the country.
• The Walden Way™: We offer a completely virtual experience. No fighting traffic or taking time off work to visit an office. You can handle everything from your couch.
• Transparency: You’ll know exactly what your options are and what our fees look like.

Take Control of Your Financial Future

The statistics are staggering: nearly 1 in 5 federal borrowers are currently in default, and the average borrower owes over $43,000. These new July 1 rules can either be a hurdle or an opportunity to reset your strategy.

Don’t wait for your servicer to “auto-place” you into a plan that doesn’t fit your budget. Whether you need Kansas bankruptcy help or a national student loan strategy, we are here to guide you.

Ready to get a clear picture of your options? Book your Student Loan Assessment today for $165 and move forward with confidence. You can also learn more about our mission and Malissa Walden to see why we do things differently.

Common Questions Borrowers Are Asking Right Now

I’m on SAVE — what happens to me?

You should expect a 90-day notice period starting July 1, 2026. During that window, you’ll need to choose a new repayment option. If you do nothing, you could be auto-placed into a Standard plan, which may come with a much higher payment than you expected.

Will my payment go up?

Likely yes. SAVE gave many borrowers access to very low payments, including $0 monthly payments. Under RAP, there is a $10 minimum payment floor, so many borrowers who paid nothing before will now have to pay at least something each month.

Can I still get forgiveness?

Yes. Programs like Public Service Loan Forgiveness (PSLF) still exist, and RAP can qualify. But borrowers should pay attention to the new “substantial illegal purpose” restrictions that could affect whether some public service employers count for forgiveness purposes.

I’m in grad school — can I still borrow?

There are new limits. For many graduate borrowers, the cap is now $20,500 per year and $100,000 lifetime. But if you were already enrolled by June 30, 2026 and had at least one loan already disbursed, you may be grandfathered under the old limits.

What about Parent PLUS loans?

For new Parent PLUS loans after July 1, 2026, borrowing is capped at $20,000 per year and $65,000 lifetime per child. These loans also lose key flexibility: no income-driven repayment options and no PSLF eligibility for those new loans.

Is RAP worth it?

For many low-income borrowers, yes. RAP may still be helpful because of its interest waiver and principal matching features. But the tradeoff is that forgiveness stretches to 30 years, which is a long time. If you’re still eligible for IBR, it may be worth comparing both options before you choose.

What’s the #1 thing I should do right now?

Go to studentaid.gov and review your account. Know what plan you’re on now, watch for July 1 notices, and don’t assume your servicer will choose the best option for you.

If you want help making sense of these changes, Walden Legal Solutions offers a $165 Student Loan Assessment for borrowers nationwide. We’ll help you compare your options and build a strategy that fits your real life.