00:00Student loan borrowers are about to experience significant changes to their repayment options,
00:05thanks to the passage of President Donald Trump's big beautiful bill.
00:10This major spending package, now headed for the President's signature,
00:13includes a slew of proposals that will fundamentally alter how Americans take out and pay off their student debt.
00:19These are being replaced with just two less generous options.
00:23The first, the Repayment Assistance Plan,
00:26will set payments at 1% to 10% of income, with a $10 minimum.
00:31While the Parent PLUS program remains, it now comes with a $65,000 lifetime cap.
00:37While it waives unpaid interest, loan forgiveness only occurs after 30 years.
00:42However, borrower advocates and Democratic lawmakers, including Senator Elizabeth Warren,
00:48argue that these changes will lead to higher student loan payments
00:51and deepen financial insecurity for millions of Americans.
00:54The legislation also aims to increase college accountability.
00:58With programs where graduates do un-earn more than the median high school graduate in their state
01:03losing federal student loan eligibility,
01:05it also extends Pell Grant eligibility to shorter-term programs.
01:09This is a notable departure from SAVE,
01:11which offered forgiveness after 10 years for lower original balances
01:15and reduced undergraduate loan payments.
01:17Borrowers currently on SAVE will have a window between July 2026 and July 2028
01:23to transition to a new plan.
01:26One of the most impactful changes is the elimination of existing income-driven repayment plans,
01:32including the popular SAVE plan.
01:34The second option is a new standard repayment plan,
01:37offering fixed payments over 10 to 25 years,
01:40with the period varying based on the original loan balance.
01:43Beyond repayment, the bill also eliminates borrowers' ability to defer payments due to economic hardship
01:49or unemployment, leaving only standard forbearance as a delay option.
01:54Furthermore, the bill significantly impacts new loans.
01:58It eliminates the Graduate Plus program,
02:00which allowed graduate students to borrow up to the full cost of attendance.
02:04Education Secretary Linda McMahon has praised the bill,
02:07calling it truly beautiful for simplifying the repayment system
02:10and curbing rising tuition costs by reducing federal borrowing amounts.
02:15Money expenses.
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