00:00student loan shakeup what you need to know now welcome to a special report on the groundbreaking
00:06changes sweeping the world of federal student loans millions of borrowers across the united
00:12states are about to face a new reality as the trump administration rolls out significant reforms
00:18aimed at what it calls fiscal responsibility these aren't just minor adjustments they're
00:24immediate shifts and long-term structural overhauls that will redefine how americans finance their
00:29education the resumption of interest charges for approximately 8 million borrowers these are
00:36individuals who until now had been benefiting from an interest-free forbearance period under the biden
00:43eras saving on a valuable education or save plan let's break down what's happening and what it means
00:49for you they don't yet know when their administrative forbearance will end or when payments will resume
00:56even though interest will now accrue the department of education is now actively encouraging borrowers
01:03to switch to new repayment plans framing save as a false promise beyond these immediate shifts
01:10president trump's spending package introduces sweeping structural changes to federal student loans
01:16beginning july 1st 2026 specifically for new borrowers these reforms will fundamentally cap how
01:23much money individuals can borrow from the federal government for college and graduates first the
01:30immediate impact hitting borrowers as early as august 1st the most pressing change the trump
01:36administration has declared the save plan illegal asserting its intention to bring back fiscal
01:42responsibility to the federal student loan portfolio u.s secretary of education linda mcmahon
01:48stated that previous administrations used so-called loan forgiveness promises to win votes while about
01:5690 percent of student loans currently come from the federal government and only 10 percent from private
02:02lenders this balance is likely to shift dramatically private student loan originations have already seen a
02:10significant jump but federal courts repeatedly ruled that those actions were unlawful
02:17while the administration links this move to a federal court injunction it's crucial to understand the
02:22court did not explicitly mandate the return of interest the financial repercussions are staggering
02:28experts predict that over the next 12 months borrowers will be charged more than 27 billion dollars in
02:34interest whether you're a current borrower an aspiring student or a parent understanding this evolving
02:41landscape is crucial for navigating your financial future but the impact goes beyond just finances
02:49this return of accruing interest is expected to have wider societal implications especially for young
02:55adults we could see further delays in family formation as student loan debt is already linked to a
03:01reduction in marriage and childbearing this has been your special report on the federal student loan
03:07landscape health and well-being are also at risk with debt strain leading to postponed medical care or
03:14cuts in essential spending many young adults are already struggling to save for retirement their extra
03:20income consumed by loan payments and we're seeing changes in basic spending habits like switching to
03:27cheaper groceries despite these immediate changes uncertainty remains for those currently under say but the story
03:34doesn't end there for the first time ever borrowers will face a total lifetime borrowing limit of 257
03:42thousand five hundred dollars for all federal student loans this is a monumental shift for graduate
03:49students the changes are particularly impactful perhaps one of the most significant changes is the
03:55elimination of grad plus loans these currently allow graduate students to borrow up to their entire cost of
04:02attendance this program will be gone entirely parent plus loans are also affected with a cap of 20 000
04:10per year per student and a 65 000 lifetime limit currently parents can borrow up to the full cost of
04:18attendance each year these new limitations are expected to reshape how students borrow many may have to borrow
04:25less make up the difference with private loans or even reconsider pursuing graduate programs
04:31aspiring lawyers doctors and dentists are considered most likely to be impacted as these changes represent
04:39quite a substantial cut in the loan students have access to data from 2020 shows that many medical law
04:46and dentistry students already graduate with more debt than these new limits would allow however some experts
04:52believe these new loan limits could provide a much-needed check on soaring tuition costs which have
04:59dramatically outpaced inflation for decades this shift in federal lending will inevitably push more
05:05students towards private lenders to bridge funding gaps looking ahead the trump administration is also
05:11offering a new income-based repayment assistance plan which will be available to borrowers by july 1st 2026.
05:20these are critical changes that demand your attention stay informed stay prepared this has been your
05:26special report on the federal student loan landscape money explainers
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