Two Major Upcoming Student Loan Changes: SAVE Plan Enrollees and Parent PLUS Borrowers

Changes to the SAVE Plan
Due to recent legal challenges, federal student loan borrowers enrolled in the SAVE Plan
have been in forbearance for the past year. These borrowers began accruing interest again
on August 1, 2025. At this point, we expect the forbearance to last indefinitely. However, the
SAVE plan will sunset by July 1, 2028, at the latest. To avoid missing out on credit toward
Public Service Loan Forgiveness (PSLF) or Income-Driven Repayment Forgiveness (IDRF)
and to prevent increasing balances, most borrowers should switch payment plans now. If you
haven’t already, visit StudentAid.gov to select a new payment plan. For most borrowers who
were in SAVE, the Income-Based Repayment (IBR) Plan is the best option now. IBR
continues to provide income-driven repayment protections and long-term affordability for
most.

Changes for Parent PLUS Borrowers
Parent PLUS borrowers face several significant upcoming changes under the recent tax and
spending bill:

• July 1, 2026, Consolidation deadline: Parent PLUS borrowers with existing loans must
  consolidate by July 1, 2026, to be eligible for an Income-Driven Repayment (IDR) plan.
  Missing this deadline means losing access to all IDR options in the future.
• New loans after July 1, 2026: A parent who takes out any new Parent PLUS loans or
  consolidates an existing Parent PLUS loan after this date will lose access to all IDR
  plans for all of their Parent PLUS loans, even for loans taken out earlier. Taking out any
  additional Parent PLUS loans after July 1, 2026, will restrict all of a borrower’s Parent
  PLUS loans to Standard Repayment Plans only.
• July 1, 2028, Enrollment deadline: Parent PLUS loans that have already been
  consolidated must be enrolled in an IDR plan by July 1, 2028, or they will forfeit
  eligibility.
• Borrowing cap: Starting in the 2026–2027 school year, new Parent PLUS borrowers will
  face a lifetime borrowing cap of $65,000 total per child, rather than up to the full cost of
  attendance. Students with two parents still face a single $65,000 cap, but there is a
  separate cap for each sibling.

These deadlines make it essential for families to plan ahead and act soon. If you have
questions about how these changes may affect your loan repayment or education funding
strategies, please reach out to Legal Services of Long Island’s EDCAP unit for guidance.

The Education Debt Consumer Assistance Program (EDCAP) provides legal assistance to people
experiencing student debt problems, including unpaid tuition bills, collection actions, and managing federal
and private student loans. Assistance is available to student borrowers, parents, and other family members
regardless of income. Legal Services of Long Island is a partner in the EDCAP network, a program of the
Community Service Society of New York. Services may include student loan counseling, litigation defense
and representation, and phone advice. Suffolk and Nassau residents, please call 516-292-8100