Major changes to federal student loan repayment rules went into effect this month and are rippling across the system. Many borrowers currently repaying their student loans, as well as prospective students and their families, will see the impacts, including through higher monthly payments.

The rule updates went into effect on July 1 and largely are tied to the Education Department’s implementation of legislative changes under the One Big, Beautiful Bill Act, the Republican-led tax and spending bill that President Trump signed into law last year. Other rule changes stem from executive actions by Education Secretary Linda McMahon, or court orders following legal challenges.

“Effective today, July 1, 2026, key provisions of President Trump’s Working Families Tax Cuts Act (the Act) take effect, simplifying student loan repayment, making higher education more affordable, and expanding access to high-quality, short-term education and workforce programs,” said the department in a statement earlier this month.

Here’s a breakdown of what has now changed for federal student loans, and what borrowers need to know.

New Student Loans Now Have Limited Repayment Plan Options

As of July 1, borrowers who take out any new federal student loans, or consolidate their existing loans via the federal Direct consolidation loan program, will lose access to all repayment options that were previously available. These include Income-Contingent Repayment (or ICR), Income-Based Repayment (or IBR), and Pay As You Earn (or PAYE), which are all income-driven repayment plans that provide borrowers with affordable payments and eventual student loan forgiveness. These borrowers also will become ineligible for legacy fixed repayment options like the 10-year Standard repayment plan, as well as the Extended and Graduated repayment plans.

These so-called “new” borrowers will be limited to just two repayment plan options. One of those plans, the........

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