Changes to federal student loans that are expected to affect millions of student loan borrowers are taking effect as of July 1. A part of President Trump's "Big Beautiful Bill," these changes mean the end of some payment plans and new limits for graduate loans. Along with the sunsetting of the Biden-era SAVE plan, these changes are expected to raise the cost of payments for millions of borrowers. Around 9 million Americans are in default on their federal student loans as of June, according to the Education Department. Hundreds of thousands more are behind on loan payments and at risk of default this year.

The Trump administration has agreed to resume student loan forgiveness for an estimated 2.5 million borrowers who are enrolled in certain in certain federal repayment plans following a lawsuit from the American Federation of Teachers. Under the agreement reached Friday between the teachers union and the administration, the Education Department will provide loan forgiveness for those eligible in certain repayment plans that offer lower monthly payments based on a borrower's earnings. The government had stopped providing forgiveness under those plans based on its interpretation of a different court decision.