Student Loan Updates for July

The Big Beautiful Bill, Major Changes to SAVE, and PSLF Updates

I’m resisting the urge to kick off this newsletter with some predictable line about July heat and “hot” student loan news, but let’s be real: a lot of you are sweating these changes. And I don’t blame you. Major shifts are happening fast, and each of our updates below could have a serious impact on you. As always, I encourage you to dig into the supporting links and get the full story.

The “Big Beautiful Bill” Is Now Law

President Trump has signed the “BBB” into law, delivering the biggest overhaul to the federal student loan system in over a decade. Key takeaways:

• New borrowing limits for grad/professional programs
• Elimination of certain federal loan types
• A brand-new IDR plan with stricter forgiveness rules

Most changes take effect July 1, 2026, but borrowers who want to preserve their current repayment plan (or forgiveness trajectory) may have only a limited window to act. Once you’re in the new system, there’s no going back.

We’ve broken it all down here: The “Big Beautiful Bill” Becomes Law

SAVE Plan Interest Subsidy Ends August 1, 2025

The Department of Education is pulling the plug on the “no interest” portion of the SAVE forbearance. While monthly payments are still paused, interest starts accruing again, even for SAVE participants

If you’re not pursuing PSLF, this is likely the end of the road for SAVE. Time to start exploring refinance options.

But if you are pursuing PSLF, don’t panic. The SAVE forbearance still counts toward PSLF Buyback – for now. Unless you’re just a few months from forgiveness, you probably don’t need to switch yet.

The Department of Education is nudging borrowers toward IBR, but given current processing delays and strategy implications, it’s best to evaluate before jumping ship.

Read our full breakdown here: SAVE Interest Update: Is It Time to Switch?

PSLF: Major Overhaul Proposed, Including Cuts to Eligibility

The Department of Education recently wrapped up Negotiated Rulemaking, and they’ve proposed sweeping changes to PSLF. These changes mostly align with President Trump’s executive order that we covered back in March, with some additional proposals:

What’s potentially being added:

• Expanded eligibility for part-time and adjunct faculty
• More nonprofit roles (like early childhood educators)
• Certain forbearance and deferment periods counted

What’s potentially being cut:

The proposal doubles down on exempting organizations which provide “activities that have a substantial illegal purpose” from qualifying for PSLF. Detailed descriptions are being provided which impact organizations providing:

• Support to terrorist organizations
• Aiding or abetting violations of immigration laws
• Aiding and abetting illegal discrimination
• Violating state “tort” laws against trespassing, disorderly conduct, obstruction of highways, etc.
• …“engaging in the chemical and surgical castration or mutilation of children or the trafficking of children to states for purposes of emancipation from their lawful parents, in violation of applicable law”

That last bullet is the one that may be impactful to many healthcare providers. If your organization provides services which could fall into that category, no employee would be awarded PSLF credit while working there.

If this proposal sticks, some borrowers currently earning PSLF credit could be cut off unless Congress or the courts intervene. We’ll be watching this closely.

The final rule is expected by November 1, 2025, with implementation on July 1, 2026.
Check out our full coverage here.

Next Steps

If you’re unsure how these updates impact your path to forgiveness or repayment, now’s the time to check in.

• New Clients: Book your comprehensive student loan consultation or refinancing meeting.
• Returning Clients: Save some time with our streamlined registration form.
• Annual Subscribers: Contact your advisor directly, or Help@StudentLoanProfessor.com

We’re staying on top of every policy shift, so you don’t have to.