most recent and impactful updates on student loan forgiveness and repayment for 2025:

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🔹 1. 🚨 Interest Resumes on SAVE Plan Loans (Aug 1, 2025)

  • The SAVE (Saving on a Valuable Education) zero-interest policy will end August 1, 2025, affecting approximately 7.7–8 million borrowers. Interest will begin accruing again after nearly a year of pause (Investopedia).

  • On average, borrowers could accrue $3,500 in interest per year, adding a significant financial burden (The Washington Post).

  • The Education Department advises transitioning to the Income-Based Repayment (IBR) or the upcoming Repayment Assistance Plan (RAP) before SAVE winds down (Investopedia).

🔹 2. New “One Big, Beautiful Bill” Overhaul

  • Signed July 4, 2025, the bill eliminates existing IDR plans (SAVE, PAYE, ICR) by July 1, 2028, leaving only:

    1. Standard repayment plan, and

    2. New Repayment Assistance Plan (RAP) scheduled for July 2026 rollout (Investopedia, Vox).

  • The bill also caps borrowing limits:

    • Grad students: $100K–$200K lifetime

    • Parent PLUS loans: max $65K per child lifetime (Vox, Bankrate).

🔹 3. Changes to Public Service Loan Forgiveness (PSLF)

  • The Trump administration has proposed to restrict PSLF eligibility, allowing the Education Secretary to exclude nonprofits engaged in activities deemed “illegal,” like supporting undocumented immigrants or gender-affirming care (TIME).

  • A negotiated rulemaking session on PSLF took place in July 2025 to refine the definition of qualifying employers; a formal rule is expected after public comments (U.S. Department of Education).

🔹 4. Tracking Progress Toward Forgiveness Halted

  • The Department of Education has temporarily stopped updating borrowers’ payment counts toward forgiveness programs like PSLF and IDR, confusing many applicants (Forbes).

  • This stems from legal challenges and backlog issues in loan servicing.

✅ What Borrowers Should Do Now

  1. Check your SAVE plan: You have until August 1 to switch to IBR or another compliant plan (Investopedia, Investopedia).

  2. Monitor PSLF changes: If you or your employer could lose eligibility, stay updated and consider alternatives .

  3. Track your payments manually: Because automatic updates are paused, keep records of all qualifying payments.

  4. Estimate your repayments: Use the Department’s Loan Simulator to see how IBR or RAP would affect your monthly payment (U.S. Department of Education).

  5. Stay alert for new rules: Public commentary on PSLF changes is open now; gather accurate info to plan ahead.

🧭 TL;DR

  • Aug 1, 2025: SAVE plan interest resumes—grab alternative IDR options now.

  • Major overhaul: IDR programs phased out by 2028, new RAP coming 2026.

  • PSLF eligibility may shrink—watch for final rules.

  • Tracking halted: Confirm your progress manually.

This is a turbulent time for student loans. Shifts in politics and court rulings mean staying informed is critical.

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