The Senate passed its Megabill on Tuesday night. The Chamber aims to vote on the bill and send it to President Donald Trump before July 4, but it is not clear if the Republicans have the votes to approve the bill in their current form.
Among numerous provisions aimed at reducing federal expenditure and increasing tax revenues, the bill presents some important changes for federal student loans.
Most of the changes in students’ loans, such as the lower limits in postgraduate loans, will not affect borrowers who are outside school and are currently reimbursed. But those who take loans next summer and then, as well as an estimate of 8 million borrowers waiting for additional action on saving a valuable refund plan based on educational income, can expect less reimbursement options if the camera approves the bill as it is.
The change in reimbursement plans could be one of the most shocking provisions of the bill for current and future federal student loans.
Two years to choose between two plans
The Senate bill reduces the number of reimbursement options currently available for federal student loans to only two plans: a standard payment plan and a new income -based plan known as refund assistance plan. The borrowers in any of the current reimbursement plans, except the Save Plan, will be able to maintain their monthly plans and payments in the same way.
The borrowers whose loans are dispersed on July 1, 2026 and those currently registered in the rescue plan, which are in an administrative tolerance since the federal courts blocked the plan to enter into force in July 2024 – You will only have the two payment plan options.
The borrowers in the rescue plan would probably have to choose another plan anyway if the federal courts retain the temporary court order against them. According to the legislation of the Republicans, these borrowers will have between July 2026 and July 2028 to choose a new plan. After July 1, 2028, the borrowers will automatically move to the income -based payment plan.
The new standard plan will give the borrowers a fixed monthly payment so that their loans pay between 10 and 25 years, depending on the size of their loans. The current standard plan has a 10 -year loan period, regardless of the amount provided.
The refund assistance plan will calculate the monthly payments between 1% and 10% of a borrower’s discretary income, below the current offers established by payments in 10%, 15% or 20% of the revenue of a borrower.
An analysis found that the monthly payments of the borrowers could increase by hundreds of dollars in rap, compared to what their payments would be in the savings plan.
