Press Release: 7/1/2026
AG Campbell Warns Borrowers Of July 1 Federal Student Loan Changes
AGO Provides Resources as New Federal Rules Take Effect
FOR IMMEDIATE RELEASE:
6/30/2026
MEDIA CONTACT
Allie Zuliani, Deputy Press Secretary
Phone
Call Allie Zuliani, Deputy Press Secretary at (617) 727-2543
Online
Email Allie Zuliani, Deputy Press Secretary at Allie.Zuliani@mass.gov
BOSTON — Massachusetts Attorney General Andrea Joy Campbell is urging student loan borrowers to learn about major changes to the federal student loan system that take effect July 1, 2026, before making decisions that could affect their monthly payments and eligibility for loan forgiveness programs.
Beginning July 1, new federal student loan rules will change repayment options for borrowers nationwide. Federal loan servicers are expected to begin notifying the nearly 7 million borrowers enrolled in the SAVE plan that they must change to a different repayment plan. Borrowers in SAVE have been in forbearance since 2024 and will face higher monthly payments in other plans. Additionally, borrowers taking out new federal loans after July 1 will have fewer repayment options. Certain Parent PLUS borrowers could also lose access to income-driven repayment plans and Public Service Loan Forgiveness.
“Federal student loan borrowers face significant changes on July 1 due to new federal limitations on repayment options. I encourage them to stay informed, update their contact information with their federal loan servicer and in their StudentAid.gov account, carefully review communications from their loan servicers, and seek trustworthy information,” said AG Campbell. “As Massachusetts’ student loan ombudsman, my office is committed to helping borrowers navigate these changes and make informed decisions about their financial futures.”
Massachusetts has approximately 130,000 federal loan borrowers enrolled in the SAVE plan. To help borrowers, the Attorney General’s Student Loan Assistance Unit has developed resources explaining repayment options, the newest income-driven plan, called RAP, Parent PLUS loan issues, and other changes to the federal student loan program, here. The Attorney General’s Office (AGO) has also produced a recorded webinar available on its website, here.
Once federal student loans become 90 days past due, borrowers may face negative credit reporting. Under current rules, after 365 of days nonpayment, loans enter default and are transferred to the U.S. Dept. of Education’s Debt Management and Collection System.
Although involuntary collections on defaulted federal student loans have been temporarily paused, they are expected to resume this year. Borrowers in default may face serious consequence, including tax refund interception, wage garnishment, and offsets of federal benefits, including Social Security benefits.
The AGO offers the following information for student borrowers looking for support:
What is happening on July 1?
New federal student loan rules take effect on July 1, 2026. The changes create a new income-driven repayment plan, called RAP, change repayment plan options, place new limits on Parent PLUS and graduate student borrowing, and affect whether some borrowers can receive loan forgiveness.
I am enrolled in the SAVE plan. What should I do?
If you are enrolled in the SAVE plan, watch for communications from your federal loan servicer and begin exploring your options now. Servicers are expected to begin sending notices on July 1 indicating that you must choose a different repayment plan within 90 days. In most cases, these notices will be sent by email or posted to your online account with your loan servicer. If you do not apply for a new plan within that timeframe, you will be placed in a standard repayment plan.
Starting an income-driven repayment application at StudentAid.gov/idr and linking to your most recent tax return will enable you to see which of the older income-driven plans you are eligible for (ICR, IBR, PAYE), monthly payment amounts, and estimated forgiveness timelines. If you have certified qualifying public service employment, you will also be able to see how close you are to Public Service Loan Forgiveness.
You can use the chart on this page to estimate your payment under the newest income-driven plan, called RAP. The federal reconciliation bill requires ICR and PAYE to be eliminated by July 1, 2028.
What is a Repayment Assistance Plan (RAP)?
RAP is a new income-driven repayment plan expected to become available in July 2026.
RAP bases monthly payments on your income and number of dependents. For some borrowers—particularly those who took out loans before July 1, 2014, RAP may offer lower monthly payments than other income-driven plans. RAP may also offer government interest subsidies to some borrowers. However, RAP does not provide forgiveness until 30 years of repayment, which is longer than the existing income-driven repayment plans (IBR, ICR, and PAYE), which come with 20-to-25-year forgiveness timelines.
More information on RAP is available on the AGO’s website, here.
What if I have Parent PLUS loans?
There are several important things to know if you have Parent PLUS loans:
1) Borrowers who did not apply to consolidate their Parent PLUS loans by April 1, 2026 will lose access to income-driven repayment plans and, in most cases, Public Service Loan Forgiveness for their Parent PLUS loans.
2) Parent PLUS borrowers who take out any new federal loans after July 1 will only have access to the new Tiered Standard plan for ALL their Parent PLUS loans and any Consolidation loans that repaid Parent PLUS loans. The new Tiered Standard plan does not qualify for Public Service Loan Forgiveness. You can learn more about the Tiered Standard plan on the AGO’s website, here.
3) Parent PLUS loans are not eligible for RAP.
What if I plan to borrow for college or graduate school after July 1?
Borrowers who take out new federal loans on or after July 1 will have access to fewer repayment options than current borrowers. The only plans available will be RAP and the new Tiered Standard plan. More information on the Tiered Standard plan is available on the AGO’s website, here.
Students and families should carefully review their borrowing needs and understand how these changes may affect repayment options.
Where can I learn more?
Additional information to help borrowers understand their repayment options and navigate these changes, including a recorded webinar, is available on the AGO’s website, here.
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