What to know about Senate bill's major changes to student loans
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Senate Majority Leader John Thune (C), Sen. John Barrasso (L) and Sen. Mike Crapo. Photo: Andrew Harnik/Getty Images
The Senate narrowly passed Trump's "big, beautiful bill" on Tuesday, which outlines substantial changes for student loan borrowers.
Why it matters: For future borrowers — and millions of current ones — fewer repayment options will be available if the House passes the current bill.
Here's what's in store for borrowers:
Fewer repayment plans for future borrowers
State of play: The bill cuts the number of repayment plan choices that federal student loan borrowers have down to two.
- One is a standard repayment plan, which gives borrowers a fixed monthly payment to repay their loans in 10–25 years. The current standard plan has a loan period of 10 years, regardless of loan size.
- The other is the Repayment Assistance Plan, which will involve monthly payments between 1% and 10% of a borrower's discretionary income (current offerings set payments at 10%, 15% or 20% of income).
- Borrowers on any current repayment plan other than the Saving on a Valuable Education (SAVE) plan will be able to keep their current payment structure, however.
SAVE borrowers have to find a new plan
- These changes will affect those who take on loans from July 1, 2026, onward and current SAVE plan borrowers, as an appeals court blocked the Biden administration plan in February.
- Under the Republicans' plan, SAVE borrowers will have between July 2026 and July 2028 to choose a new plan. After July 1, 2028, those borrowers, if they haven't chosen one, will automatically be enrolled in the income-based repayment plan.
- There are about 8 million federal loan holders enrolled in SAVE plans, making it the most popular income-driven repayment plan.
Graduate plans eliminated, scaled down
- The legislation also slashes the Graduate PLUS Program, which covers the full cost of graduate or professional programs.
- Instead, there will be a new lifetime $100,000 cap on loans for graduate students, $200,000 for medical and law school students.
Catch up quick: The bill's Senate passage represented a significant achievement for Senate leadership and the White House.
- The taxes, border and defense package, however, still has to clear the House — where discontent has been building for days.
- Polling has been bad for the bill, which slashes food and health benefits for the poorest Americans, while giving tax cuts to higher earners.
What we're watching: House lawmakers have been raising alarms about the Senate's changes, with conservatives decrying how much it would add to the deficit and moderates worried about its deeper cuts to Medicaid.
