# Student Loan Changes Take Effect July 1
Major shifts in federal student loan policy arrive July 1, reshaping repayment options and borrowing limits for millions of borrowers.
The SAVE repayment plan, introduced in 2023 as the Biden administration's income-driven repayment option, enters a new phase with expanded benefits. Under SAVE, borrowers earning under 225% of the federal poverty line pay nothing monthly, and undergraduate loan interest does not accrue if payments stay current. The plan caps monthly payments at 5% of discretionary income, down from the standard 10%.
The administration is simultaneously ending the Public Service Loan Forgiveness Limited Waiver, which expires June 30. This waiver allowed borrowers in public service roles to count previous payments toward forgiveness, regardless of repayment plan. After June 30, borrowers must enroll in an income-driven plan like SAVE to continue counting payments toward eventual forgiveness.
New borrowers face adjusted annual loan limits starting July 1. The federal government reduces dependent undergraduate borrowing caps and increases independent student and graduate student limits to account for inflation and borrowing patterns. These changes affect how much students can borrow each year.
Borrowers currently in the Public Service Loan Forgiveness Limited Waiver must act before the deadline. Those planning to seek public service loan forgiveness should enroll in SAVE or another qualifying income-driven plan.
The changes follow the Supreme Court's rejection of the Biden administration's broad student loan forgiveness plan in 2023. The SAVE plan represents the administration's narrower approach to debt relief through income-based repayment rather than blanket forgiveness.
For borrowers, the transition requires active decision-making. Missing the SAVE enrollment deadline or remaining in discontinued repayment plans could cost them forgiveness progress. Student loan servicers, including