July 1 Student Debt Changes Are Causing ‘A Lot of Anxiety,’ Experts Say: Here’s How to Prepare
The SAVE program is ending—here's what millions of borrowers need to know
Key Takeaways
- Millions of borrowers must leave the SAVE plan and choose a new repayment option by July.
- Higher monthly payments could strain budgets already impacted by inflation and rising costs.
- Experts urge borrowers to review repayment plans and update loan account information now.
On July 1, the student plan repayment plan known as SAVE—Saving on a Valuable Education—will officially be dismantled. This means millions of borrowers will have to adjust to new payment routines—something that could, and most likely will, significantly alter their monthly budgets. Below we share everything borrowers need to know about the changes, including what people need to do now to protect their payments.
What to know about the student loan changes happening in July
In December of 2025, the Department of Education announced the end of the SAVE program, which was created by President Joe Biden in 2023. Some 7 million Americans benefited from the program, which allowed them to make smaller payments toward their student loans each month.
The decision was among the most disputed of Biden’s presidency, triggering lawsuits from several states. Missouri’s challenge ultimately proved decisive, and in December 2025, both the Department of Education and the Trump administration sided with the state, bringing the SAVE program to an end
“For four years, the Biden Administration sought to unlawfully shift student loan debt onto American taxpayers, many of whom either never took out a loan to finance their postsecondary education or never even went to college themselves, simply for a political win to prop up a failing Administration,” Under Secretary of Education Nicholas Kent said in statement in December 2025. “The Trump Administration is righting this wrong and bringing an end to this deceptive scheme. The law is clear: if you take out a loan, you must pay it back. Thanks to the State of Missouri and other states fighting against this egregious federal overreach, American taxpayers can now rest assured they will no longer be forced to serve as collateral for illegal and irresponsible student loan policies.”
As a result of that decision, the Department of Education will stop approving or accepting applications for a SAVE plan. They will force the millions of people enrolled in a SAVE plan to pick a new “legal” repayment plan. One that’s been heavily pushed by the Department of Education and President Trump is the administration’s new Repayment Assistance Plan (RAP) program, which was announced in Trump’s One Big Beautiful Bill Act (OBBBA) and allows borrowers’ monthly payments to be determined by their income.
If borrowers don’t choose a new student loan repayment plan, they will be automatically enrolled in a standard repayment plan, which generally has fixed payments over 10 years.
How the elimination of the SAVE program impacts student loan borrowers
Aside from being forced into a new program, many student loan borrowers will face higher fees and increased minimum monthly payments after the SAVE program ends. This is causing serious concern among financial experts, who worry these changes—along with President Trump’s tariffs, rising gas prices and inflation—will force borrowers over the edge financially.
“There’s a lot of anxiety out there,” Betsy Mayotte, president of The Institute of Student Loan Advisors, told The New York Times. “It’s not just about the student loan payments going up. It’s everything hitting at once.”
Are any other student loan changes happening in July?
Along with the discontinuation of the SAVE program, several provisions from Trump’s Working Families Tax Cuts Act will also take effect in July of this year. One of the provisions people are most concerned about is the new borrowing limits for graduate students, which vary significantly depending on whether someone is pursuing one of 11 designated “professional degrees.”
Currently, according to the administration, only 11 specific doctoral-level programs qualify as professional degrees: medicine, law, veterinary medicine, podiatry, pharmacy, optometry, osteopathic medicine, dentistry, chiropractic, theology and clinical psychology. Students pursuing those professional degrees will have higher borrowing limits, while those in other graduate programs face stricter caps. You can view the exact breakdown below.
- Graduate students without a professional degree can borrow up to $20,500 a year, with a $100,000 lifetime limit.
- Students pursuing a professional degree (like medicine or law) can borrow up to $50,000 a year, with a $200,000 lifetime limit.
“President Trump’s Working Families Tax Cuts Act addresses longstanding challenges in higher education and federal student lending, including exorbitant tuition costs, unchecked borrowing, and a confusing maze of repayment options that too often leave borrowers with higher balances despite making payments,” Kent said in a press release in April of this year. “This final rule will help ensure students can access higher education without racking up excessive loan debt, offer repayment options that better serve borrowers and force institutions to reduce costs.”
That decision was met with a lot of pushback, especially since nursing graduate programs were not considered “professional degrees” even though nearly every other medical profession was. The Department of Education justified this decision, saying, “The definition of a ‘professional degree’ is an internal definition used by the Department to distinguish among programs that qualify for higher loan limits, not a value judgement about the importance of programs. It has no bearing on whether a program is professional in nature or not.”
“It is important to remember that the loan limits are limited to graduate programs and have no impact on undergraduate nursing programs, including four-year bachelor’s of science in nursing degrees and two-year associate’s degrees in nursing. Eighty percent of the nursing workforce does not have a graduate degree,” the department concluded.
What to do before July
In order to prepare for the changes in student loan payments and caps, experts recommend taking time over the next few weeks to go over your plans and see what you can do to either minimize the financial effects or find out what new plan works best for you.
“If you have not been paying attention to your loans for four, five, six years, totally understandable. But now is the time to make sure your contact information is up to date,” Winston Berkman-Breen, legal director of the advocacy group Protect Borrowers, told CBS News. “Make sure you have your login with studentaid.gov.”
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