July 1 Launch for Trump's Student-Loan Overhaul Brings New Plans and Caps

On July 1, the sweeping student-loan overhaul is set to take effect, introducing two new repayment plans—Repayment Assistance Plan (RAP) and a tiered standard plan—while phasing out the SAVE plan. RAP ties monthly payments to income (1%–10% of AGI) with 30-year forgiveness, and the tiered plan bases terms on loan principal with a $50 minimum monthly payment; borrowers who took out loans after July 1 will only have RAP or the tiered option. The SAVE plan is ending, forcing about 7 million borrowers to transition within 90 days or be auto-placed on a standard or tiered plan. New lifetime borrowing caps are set at $100,000 for graduate students and $200,000 for professionals (11 programs max), with a $65,000 cap per child for Parent PLUS. Critics warn higher monthly bills for some and potential shifts to riskier private loans, and lawsuits over the policy continue.