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Navigating recent student loan repayment changes

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Written by Degrees Not Debt team members Bridget Moore and Andrea Cecconi. Edited by Heaven Keane.

July 1, 2026, marked big changes for borrowers with federally held student loans, limiting repayment options and causing millions of people to see significant increases in their monthly payments. The Saving on a Valuable Education (SAVE) plan, enacted by the Biden administration, was eliminated by the U.S. Court of Appeals earlier this year, leaving borrowers in limbo as they try to find affordable repayment options.

Borrowers who were previously enrolled in SAVE and have not enrolled in a new repayment plan should expect to receive communication from both their student loan servicer and the Department of Education (ED) about updating their plan. Borrowers who do not choose a new repayment plan will be automatically placed in the new Tiered Standard repayment plan, which is not a qualifying repayment plan for Public Service Loan Forgiveness (PSLF). There is significant justified confusion about what steps borrowers need to take and which plans are available. Here is what else you need to know about your repayment options and the landscape around student loans this summer:

For borrowers seeking PSLF

There are four Income Driven Repayment plans available if you do not have new loans after July 1, 2026: Income Based Repayment, Pay as You Earn, Income Contingent Repayment, and the new Repayment Assistance Plan. All four plans qualify as eligible repayment plans for PSLF. Borrowers who enroll in ICR or PAYE can remain in that plan until July 1, 2028, when they will sunset. Borrowers will then have to move into IBR or RAP for the duration of their repayment period. However, if at any point, a switch is made to the just-launched RAP; borrowers are prohibited from re-enrolling in IBR, ICR or PAYE. For borrowers with new loans after July 1, 2026, RAP is the only IDR plan available.

For borrowers who are not seeking PSLF

In addition to the IDR plans, you also have access to the 10-year Standard, Extended Repayment, Graduated Repayment, and the new Tiered Standard plan. These plans are a fixed amount over a period of time depending on your loan balance. Again, if any new loans are disbursed after July 1, 2026, only the Tiered Standard plan is available.

For Parent PLUS borrowers

If these loans are already part of a Direct Consolidation Loan, you can retain access to PSLF, but only if no new loans are taken out after July 1, 2026. Parent PLUS borrowers must enroll in the ICR plan and make at least one payment; borrowers then have the options of switching to the IBR plan if that monthly payment amount is lower. If these loans are not consolidated, then you can only make payments on one of the standard plans outlined in the previous paragraph.

Our recommendation is to log into your studentaid. gov account and use the repayment calculator to compare plans and get estimates on your monthly repayment amount.

Education Minnesota’s Degrees Not Debt team supports members struggling with student loan debt by providing training resources and connecting members to resources they can trust. The team regularly hosts webinars to help members navigate the student loan repayment landscape and provides updates on important changes that impact borrowers. Those webinars are available anytime on MEA Online.

Other key changes as of July 1, 2026

  • The Grad PLUS loan program is ending for anyone starting graduate school after this date. Borrowers will remain eligible for other Direct Loans with new lending caps.
  • New caps on federal student loans have been implemented:
  • $100,000 aggregate lifetime borrowing limit for borrowers in graduate programs.
  • $257,500 total over the lifetime of a borrower; new guidance as of April 17 includes loans taken out prior to July 1, 2026, retroactively applying this rule to existing borrowers.
  • Parent PLUS loans will be capped at $20,000 per student per year.
  • PP loans will be subject to a $65,000 lifetime limit per dependent student.
  • A new rule allows borrowers who use auto-pay to make their loan payments to have their interest rate cut by 1% through June 30, 2028.

The legal landscape remains active when it comes to rules implemented by the Trump administration. On June 30, 2026, the U.S. District Court of Massachusetts struck down a rule promulgated by the Administration that would have limited employee eligibility for PLSF. In March 2025, President Trump issued an executive order to exclude employees of public organizations that conduct “illegal activities” from the PSLF program; this order would have given discretion to ED in determining eligibility exceeding its legal authority. The ruling that this rule is “arbitrary and capricious” sets up additional court battles but gives borrowers clarity about their ability to pursue PSLF under federal law.

Limitations on borrowing for graduate degrees remain under a stay by the courts that continue to rule that the Trump Administration’s rules exceed statutory authority. At the time of this writing, the courts have forced the administration to maintain a broader list of professional degrees and therefore higher borrowing limits than first published. Education is still not included in this list, but professional degrees in nursing, physical therapy, occupational therapy, speech and language pathology and school psychology remain subject to limits closer to the actual costs of programs.

We will continue to provide updates as more information becomes available. Please contact the Degrees Not Debt team for assistance in navigating this and any other student loan forgiveness challenges at DND@edmn.org.

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