The federal student loan system is facing major changes. New rules signed into law have officially ended the SAVE repayment plan. The reforms will also restrict future forgiveness options for parents. These changes will impact how millions of Americans manage their student debt. Most new rules will take full effect on July 1, 2026.
SAVE Plan Ends for Millions of Borrowers
Congress has now repealed the popular SAVE plan. Nearly 7.7 million borrowers had enrolled in the program. The government placed those borrowers in a temporary forbearance. The Department of Education will transition them into other repayment plans. One new option is the Repayment Assistance Plan (RAP). RAP sets monthly payments between 1% and 10% of a borrower’s income.
Major Changes Coming for Parent PLUS Loans
Parents who borrow for their children face significant changes. After July 1, 2026, new Parent PLUS loans will have fewer options. These new loans will not qualify for income-based repayment plans. They also will not qualify for Public Service Loan Forgiveness (PSLF). This marks a major shift from the current system.
What Borrowers Should Do Now
Experts advise borrowers to act before the deadlines. Families with existing Parent PLUS loans should consider consolidating now. This action can lock in current repayment options before they disappear in 2026. Former SAVE participants should review their new repayment plan assignments. An expert warned that staying in forbearance will cause interest to grow.
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