Federal Student Loan System Undergoes Major Reforms, Ending SAVE Plan and Imposing New Borrowing Limits

Effective July 1, 2026, and August 1, 2026, significant changes to the federal student loan system have taken effect. The Biden-era 'Saving on a Valuable Education' (SAVE) plan has been terminated, with borrowers transitioning to new alternatives like the Repayment Assistance Plan (RAP) or the Tiered Standard repayment plan. New limits are also in place for Parent PLUS loans, capped at $20,000 annually and $65,000 aggregate per dependent student, and for graduate students, with professional students able to borrow up to $50,000 annually or $200,000 total, and other graduate students up to $20,500 annually. Furthermore, loan amounts for part-time undergraduate and graduate students will be reduced proportionally to their credit load for the 2026-2027 academic year.