July 1 Federal Student Loan Overhaul

OBBBA triggers sweeping changes: SAVE, PAYE, ICR end; new RAP and Tiered Standard plans launch; borrowing caps for grad ($50k/year) and Parent PLUS ($20k/year annual, $65k lifetime); Graduate PLUS eliminated; PSLF employer eligibility narrowed. Nearly 1M of 7M+ SAVE borrowers have left the defunct plan (30% to RAP, 50% to IBR, 20% to older plans). 90-day window confirmed. Timeline compressed: Nelnet says all SAVE exit notices by end of 2026, MOHELA says July-Oct 2026. Default surge: 9.5M in default, $233B. New interest rates 2026-27: undergrad 6.53%, grad 8.08%, PLUS 9.08%. Critical trap: new Direct Loan after July 1 can force all existing loans onto new plans, erasing IDR progress. Parent PLUS borrowers after July 1 lose IDR access entirely. Borrowers must actively select RAP for PSLF credit. New ICR detail: existing borrowers can still enroll in ICR until 2028, but new borrowers cannot. Legal challenges ongoing. MOHELA glitch: false delinquency reports. Education Department debunks nursing rumors: 95% unaffected, but $100k cap real for grad. Court rejected intervention to restore SAVE plan as untimely; SAVE is dead. General news reinforces urgency of 90-day window.