Headline Roundup • July 1st, 2026
Is Your Student Loan Situation About to Change?
Education,Student Loans,Colleges And Universities,Federal Spending,Government Funding,Banking And Finance,Higher Education,College Degrees,Student Loan Debt,Student Loan Forgiveness,Debt,Education Department
Summary from the AllSides News Team
The Education Department is enacting several student loan reforms this week for both new and existing borrowers.
Repayment Plan Replacements: The revised One Big, Beautiful Bill Act is set to replace the Biden administration's student loan repayment plans on July 1st. The two new programs are the Tiered Standard Plan and Repayment Assistance Plan (RAP). The Pay as You Earn (PAYE) and Income-Contingent Repayment (ICR) plans are set to be phased out by 2028, and additional programs are contingent on more narrow qualifications.
The Education Department announced an impending end to the "illegal" Biden-era Saving on a Valuable Education (SAVE) Plan in December. If recipients do not enroll in a new plan by their imposed deadlines, they will be automatically enrolled in the Tiered Standard Program or RAP. The Hill (Center bias) highlighted the SAVE Plan's seven million recipients, some of whom were reportedly exempt from monthly payments. The outlet said either of the new plans "could increase monthly payments by hundreds of dollars."
Interest Rate Reductions: Interest rates for qualified student loan borrowers enrolled in "autopay" will temporarily reduce by 1% from July 1, 2026 to June 30, 2028. The enrollment window ends on September 30, 2026.
Loan Eligibility Reductions: Amid increasing borrowing rates for both undergraduate and graduate studies, the Education Department announced several reductions to student loan eligibility. Fields evaluated as "low-earning" – such as religious studies and music – will no longer be eligible for the Title IV student loan program (though programs may still request Pell Grants). The evaluations are based on "earnings tests" under the new Student Tuition and Transparency System and Earnings Accountability initiative to determine the financial benefits of each field. Public service fields exclusive to disability care are largely exempt from the tests' qualifications, according to the Education Department.
The initiative reportedly aims to "rein in unsustainable student loan borrowing ... and bring uniform accountability across the higher education system." The National Education Association said it "unfairly penalizes essential but lower-paying public service fields," and Just The News (Lean Right) criticized the "subjective nature of 'social value' vs. 'sufficient earnings.'"
Associated Press (Lean Left) reported that this week, two federal judges blocked the Trump administration's efforts to cancel student loan forgiveness for public service programs deemed to have "substantial illegal purpose" through the support of practices like hormone therapy.
Borrowing Limits: Federal student loans for graduate students were capped at $20,500 annually and $100,000 total on July 1st, under the revised One Big, Beautiful Bill Act. The Parent PLUS program's benefits were also limited on July 1st to curb "historically high levels of debt that many parent borrowers have struggled to repay" under Trump's Working Families Tax Cuts Act (the Act), according to the Education Department. The department also imposed a novel lifetime borrowing limit of $257,500.
RELATED: Track Trump's Campaign Promises on Student Debt | AllSides
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Featured Coverage of this Story
The Education Department has approved a plan to cut federal loans to college programs that result in low-earning jobs – a move the Trump administration sees as an opportunity to rein in runaway borrowing, while critics argue it is a blow to students seeking degrees in such fields as music, public service and religious studies.
The department announced the so-called "rule" Monday for its new Student Tuition and Transparency System and Earnings Accountability initiative – after saying in April, when the rule-drafting process started, that the federal student loan portfolio...
via The Hill
If you owe back federal student loans, or are hoping to get some soon, you could be impacted by the widespread changes rolling out on Wednesday that cut back on repayment options and cap borrowing limits.
More specifically, on July 1, the Biden-era Saving on a Valuable Education plan (better known as the SAVE plan) will end, limits will be imposed on how much graduate students and parents (through the Parent PLUS loans) can borrow in federal student loans, and a graduate borrowing program will end...
A pair of federal judges struck down a Trump administration overhaul to a public service forgiveness program for student loans, ruling Tuesday in separate cases in favor of advocates who said the program risked becoming a tool for political retribution.
U.S. District Judge Myong Joun in Massachusetts vacated the U.S. Education Department's changes, saying they overstepped the agency's power and threatened to violate First Amendment protections for free speech. The ruling came in response to a pair of lawsuits filed by more than 20 states along with a coalition of...
