Federal Student Loan Program Undergoes Significant Changes Starting July 1

Major revisions to federal student loan programs are scheduled to begin on July 1, 2026, affecting millions of borrowers. These changes, enacted through new legislation, introduce new borrowing caps for graduate and Parent PLUS loans, and eliminate Graduate PLUS loans for new borrowers. Additionally, the SAVE plan is being phased out, potentially leading to higher monthly payments for some, while auto-pay enrollees will receive an interest rate reduction. A recent judicial block on some graduate student loan restrictions adds a layer of complexity to the rollout.