Student Loan Updates Now in Effect as of July 1, 2026
SAVE Plan Has Ended The SAVE Plan has ended due to court action. Borrowers in SAVE forbearance are being contacted by their loan servicers and will have 90 days from their individual notice to select a new repayment plan. If no action is taken by the borrower’s deadline, they will be placed in a Standard Repayment Plan.
The Saving on a Valuable Education (SAVE) Plan was a federal Income-Driven Repayment (IDR) option for student loan borrowers. Introduced in 2023 as a replacement for the Revised Pay As You Earn (REPAYE) Plan, SAVE offered lower monthly payments and expanded repayment benefits for many borrowers. However, due to court action, the SAVE Plan has ended earlier than expected.
Key Points:
The earliest borrowers will be forced to leave the SAVE forbearance is ending September 2026—not July 1.
Borrowers can switch plans before receiving a notice.
Interest continues to accrue during SAVE forbearance, and no forgiveness credit is earned.
Borrowers placed in a Standard Plan can later apply for an Income-Driven Repayment (IDR) plan.
Other Changes Now in Effect as of July 1, 2026, The One Big Beautiful Bill Act (OBBBA) made major student loan changes, including:
New borrowing limits are now in effect, and Graduate PLUS loans have been eliminated (with some exceptions).
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Student borrowers who take new loans or consolidate existing loans on or after July 1, 2026, will have access only to:
Repayment Assistance Plan (RAP), or
New Tiered Standard Fixed Repayment Plan
New Parent PLUS borrowers no longer have access to IDR plans or forgiveness programs and must pay all loans back in the Tiered Standard Fixed Plan.
Helpful Resources
Repayment Calculator: Federal Student Aid Repayment Calculator
Apply for or change an IDR plan: Federal Student Aid IDR Application
Additional information: EDCAP Student Loan Changes
Quick Tips
For PSLF, choose the lowest-cost IDR plan you qualify for.
RAP is sometimes cheaper but be aware it has a 30-year path to forgiveness and you may have to pay 10-20 years longer than in existing IDR plans.
Parent PLUS borrowers who consolidated before July 1, 2026, and don’t take additional loans, will have access to the IBR plan. You must make one payment in ICR first.
Consolidation can affect forgiveness credit and repayment options—seek advice!
Borrowers in default should take advantage of the current pause in collections to restore their loans to good standing.
Contact EDCAP:
For free 1-1 counseling for New Yorkers there are three ways to contact us:
Helpline: 1-888-614-5004 (M-F, 9:00am-4:00pm)
Email: edcap@cssny.org
Book an appointment online: https://www.edcapny.org/contact-us/
