What to know about Trump's student loan overhaul
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A sweeping overhaul of the federal student loan system took effect this month, thrusting millions of borrowers into new repayment plans that could leave some with higher monthly payments.
Why it matters: More than 2.7 million Floridians owe a combined $108 billion in federal student loans, one of the largest debt totals of any state.
- Borrowers in Florida have an average of $39,574 in student debt, slightly above the national average, according to the Education Data Initiative.
Driving the news: After years of legal limbo and paused repayments, SAVE Plan borrowers will now receive notices to enroll in a different repayment plan within 90 days.
- If a borrower doesn't do so, they'll be automatically enrolled in the standard repayment plan.
- Those who have to switch repayment plans but don't expect to take out any new federal loans retain more options than those still borrowing.
Zoom in: The One Big, Beautiful Bill Act created a new Tiered Standard repayment plan and a new income-driven plan, the Repayment Assistance Plan. New borrowers will be left with just those two repayment options.
- The Tiered Standard Plan offers fixed monthly payments to repay a loan in full within a minimum of 10 years or a maximum of 25 years, depending on the amount borrowed.
- Meanwhile, under the Repayment Assistance Plan, monthly payments are based on income and the number of dependents. So, the more you make, the more you'll pay per month.
What's next: Borrowers should review their repayment plan options, and families and students may need to reconsider their financial strategies.