What to know about Senate bill's major changes to student loans
Why it matters: For future borrowers — and millions of current ones — fewer repayment options will be available when and 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 to 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 whose take on loans from July 1, 2026 onward and current SAVE plan borrowers, with an appeals court blocking 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.
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