Student Loans
Following passage of Republicans’ H.R. 1, student loan borrowers can anticipate many harmful changes and reduced options in the coming years. I strongly opposed these changes and continue working to expand affordable access to higher education. While I am unable to provide legal guidance concerning your student loans, this page provides a timeline for actions borrowers may want to take in the coming years to prepare for the changes to student loan programs. To see a full timeline of when changes will go into effect, you can click here.
Your loan provider and the Department of Education should remain your primary points of contact. In certain cases, my office may be able to offer casework assistance should you not be receiving timely assistance from the Department of Education. That assistance is typically limited to inquiries made by my office on your behalf to the Department rather than any specific policy matters or opposition to these changes. To request assistance with PSLF completion applications or discharged loans with the Department, visit my website here or call my Austin office at (512) 916-5921 to speak with a constituent services representative. My office is open from 8:30AM CT to 5:30PM CT.
Table of Contents
Legal Resources in Austin & Casework Information
Updates to SAVE Plan Changes
Upcoming Wage Garnishment for Defaulted Federal Student Loan Borrowers
- What can you do
Changes to Student Loan Borrowing:
- Changes to Graduate PLUS Program
- Changes to Parent PLUS Program
Changes to Existing Student Loan Plans:
- Changes to SAVE Plan
- For New Borrowers
- New Loan Repayment Plans for Borrowers
- Continuing Loan Repayment Plans for Existing Borrowers
Proposed Changes to Public Service Loan Forgiveness
Opportunities for Pell Grants for Workforce Development
Legal resources:
Austin Lawyer Referral Service
P.O. Box 6852
Austin, TX 78762
Phone: 512.472.8303
Texas RioGrande Legal Aid
Austin Office
4920 N. I-35, Austin, TX 78751
Phone: 956.996.8752
The Legal Hotline for Texans
815 Brazos, Suite 1100
Austin, TX 78701
Phone: 800.622.2520
Updates to SAVE Plan Legal Challenges:
Effective August 1, 2025, borrowers began seeing interest accrue on SAVE plan loans, which are still in forbearance status.
Some sources of guidance for next steps on these plans can be found here and here. The most recent guidance on updates to legal challenges can be found on the Department of Education’s site here.
Upcoming Wage Garnishment for Defaulted Federal Student Loan Borrowers:
In May 2025, the Department of Education announced their intention to resume collections on defaulted student loans. The Department had originally announced intentions to garnish Social Security benefits, but have since reversed this plan. Some individuals have had their federal tax refunds seized already.
While the Department has not announced a specific date such wage garnishments will occur, borrowers can proactively take action to prevent such financial strains.
What can you do:
- Borrowers can resolve a defaulted loan through loan consolidation or rehabilitation.
- For more information on this, you should contact the Department of Education’s Default Resolution Group directly at 1-800-621-3115 or at 1-877-825-9923 for those who are deaf or hard of hearing.
- If you received a notice of wage garnishments, it should have included information to attend a hearing to challenge such garnishment. If you have found yourself recently unemployed or filed for bankruptcy, your wages may be protected.
Changes to Student Loan Borrowing:
Changes to Graduate PLUS Program:
Effective July 1, 2026, the Graduate PLUS program will be ending. The yearly borrowing limit for:
- Graduate students will be reduced to $20,500 for most graduate programs, with a $100,000 graduate school lifetime cap.
- For those seeking professional degrees (such as law or medical training), borrowers will have a limit of $50,000 per year, with a $200,000 graduate school lifetime cap.
Students who will be newly enrolled after these dates should begin financial planning and seeing what scholarships may be available to them. Schools should be a source of contact for planning purposes.
For those who are enrolled in these graduate programs before July 2026, you will be able to continue utilizing Grad PLUS loans for up to three additional years.
Changes to Parent PLUS Program:
Effective July 1, 2026, the Parent PLUS loan will be changing. Parents borrowing on behalf of their students under this program will:
- Encounter a cap of $20,000 per year and a $65,000 lifetime cap
- NOT be able to enroll in income-driven repayment plans. They will instead be restricted to the standard plan (details below) with fixed monthly payments. If parents take out any new PLUS loans, they will lose eligibility for all prior loans to be considered under income driven repayment plans.
Changes to Existing Student Loan Plans:
Recent Republican legislation has significantly restricted affordable loan repayment plans and limited federal aid made available to students.
Changes to SAVE Plan:
Beginning July 1, 2026, several Income Driven Repayment plans– such as SAVE, PAYE, and ICR, will be sunsetted or modified. Therefore, borrowers in these existing plans must transition to the modified or newly introduced plans.
Given the Department’s mass layoffs, many borrowers can expect delays when applying for these newer payment plans. Automatic transition will occur on July 1, 2028, should borrowers choose not to take action; however, this transition may not ensure students are placed in the payment plan that will align most with their financial situation. Therefore, you may consider proactively preparing your financial planning and application to transfer to plans that align with your repayment priorities. Should you choose to stay in your SAVE Plan, you should note that interest has begun accruing on these loans.
For New Borrowers:
Any loan funds first disbursed on or after July 1, 2026, whether you’re a brand-new borrower or adding to previous debt, can only enter the standard 10–25 year repayment plan or the new Repayment Assistance Plan (RAP). Funds borrowed before that date remain in your current plan (including SAVE, PAYE, or ICR) until the broader IDR sunset on July 1, 2028.
New Loan Repayment Plans for Borrowers:
1. The standard plan: Such plans are likely to be more expensive than current repayment plans, such as SAVE. This plan offers inflexible monthly payments.
Repayment Window: 10-25 Years (Conditional on the amount of loans a student has).
Under this plan, borrowers with larger debts would qualify for a longer repayment period:
- If you owe less than $25,000, you will repay over 10 years.
- If you owe $25,000 or more but less than $50,000, you will repay over 15 years.
- If you owe $50,000 or more but less than $100,000, you will repay over over 20 years.
- If you owe $100,000 or more you will repay over a 25-year period.
2. The Repayment Assistance Plan (RAP)
For borrowers who may be concerned that the new standard plan is not in line with their financial situation, and would prefer a more flexible monthly payment plan, RAP is available. Under this plan, payments would mostly be based on borrowers' total adjusted gross income (referred to as AGI here on out).
- If you earn less than $10,000 a year, you would be responsible for paying $10 a month.
- If you earn more than $10,000 but not more than $20,000, your payment will be based on 1% of AGI.
- If you earn more than $20,000 but not more than $30,000, your payment would be 2% of AGI. This pattern would continue as it relates to your income scale.
- However, these repayment plans would be capped at 10% of AGI for borrowers earning $100,000 a year or more.
- Forgiveness would be considered after 30 years of qualifying payments.
- There are opportunities for interest to be partially waived and principal balances to shrink under this plan. You should consult with your loan provider for specific details as this would relate to you.
Continuing Loan Repayment Plans for Existing Borrowers:
- Borrowers who took out loans before July 1, 2026, will have access to an existing plan, referred to as Income Based Repayment (IBR).
- For borrowers with loans older than July 2014, their payments are capped at 15% of discretionary income. Payments on younger loans are capped at 10%.
- Pre-2014 loans qualify for forgiveness after 25 years.
- For newer loans, it's just 20 years.
Note: Applications for loan forgiveness under IBR plans are not being processed by the Education Department at this time due to the ongoing litigation surrounding the SAVE plan. The Department plans to resume discharging loans at a later date. It is best to consult directly with your loan provider if this applies to you.
Proposed Changes to Public Service Loan Forgiveness
Under President Trump’s Executive Order #14234, qualifying “public service” activities are being redefined. This matter is still undergoing rule making, but will likely result in significant restrictions on qualifying nonprofit organizations. For more information on who may be impacted, you can click here.
Opportunities for Pell Grants for Workforce Development
Starting July 1, 2026, Pell Grant eligibility has expanded to include short-term job training programs that are between 8 to 15 weeks. Students are unable to use traditional Pell grants alongside these short-term workforce grants. While more guidance is expected to be released, students can start planning to take advantage of such opportunities. For more information, you can click here.