Tiered Standard repayment plan

President Trump's tax and spending bill has introduced new federal student loan changes, including the elimination of the Biden-era SAVE payment plan and the implementation of income-based and tiered repayment options. Future students face stricter borrowing caps, with limits set for master's, professional, and Parent Plus loans. The Department of Education claims these changes will reduce excessive borrowing and pressure institutions to reassess costs.

The U.S. Department of Education announced a 1% interest rate reduction for student loan borrowers enrolled in auto pay from July 1, 2023, through June 30, 2028. New repayment plans, including the income-driven Repayment Assistance Plan (RAP) and Tiered Standard Repayment Plan, will launch next month, with RAP offering a match on on-time payments and eligibility for Public Service Loan Forgiveness (PSLF) after 120 payments.

Federal student loan borrowers enrolled in automatic payments will receive a 1% interest rate reduction starting July 1, 2026, through June 30, 2028. Two new repayment plans—the income-driven Repayment Assistance Plan and Tiered Standard repayment plan—will also launch July 1, offering income-based payments and fixed-term options.