Starting July 1, federal student loan borrowers must select a new repayment plan under the Big Beautiful Bill Act passed in July 2025, with only two choices available. Those who do not choose by the deadline will have a plan selected by the government. About 7 million borrowers enrolled in the SAVE income-driven plan will receive notices from federal loan servicers with instructions and deadlines. SAVE enrollees have been in a nearly two-year, interest-free forbearance since 2024 due to Republican-led legal battles. The Repayment Assistance Plan caps monthly payments as a percentage of adjusted gross income from 1% to 10%, includes a mandatory $10 minimum, offers $50 off per dependent, and provides credit toward Public Service Loan Forgiveness. The Tiered Standard Plan sets repayment terms across four time frames, requiring loans under $25,000 to be repaid within 10 years, with longer periods for higher balances.
#student-loans #repayment-plans #income-driven-repayment #public-service-loan-forgiveness #federal-student-aid
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