Federal Loan Repayment Just Changed: Here’s What Students Need to Know
At Last Mile Education Fund, our mission is to support financially vulnerable college students across the finish line to ensure that every student striving toward a high-demand STEM field achieves their potential. We provide funding at the moment students need it most, followed by post-award launch support that connects them to resources across the STEM ecosystem. We believe every Last Mile student deserves access to the information, networks, and support that their more resourced peers too often take for granted.
That is why we are highlighting upcoming federal policy changes that will directly affect Last Mile awardees. In 2026, more than 75% of our students reported taking out subsidized loans. Last year, when the “One Big Beautiful Bill Act” (OBBBA) had just passed, we wrote about its potential implications. Now, as of this summer, the Saving on a Valuable Education (SAVE) plan has been officially eliminated, and borrowers will need to take action this fall to avoid being locked into a more costly repayment plan.
What Students Need to Know
Loan servicers will begin notifying borrowers starting July 1, giving students 90 days to transition to a different repayment plan.
Two main options are available for students:
A Standard Plan: A traditional repayment structure with fixed monthly payments.
The Repayment Assistance Plan (RAP): A new income-driven plan that adjusts monthly payments to a borrower's adjusted-gross income (AGI)
If you are currently enrolled in SAVE and you do not select a new payment plan, you may be automatically enrolled in a plan that does not provide income-based repayment, which may increase your monthly payments.
What Students Should Do
Check your email and your loan servicer's portal for a transition notification.
Review your options and compare monthly payment amounts under each plan given your current income. The office of Federal Student Aid offers a Repayment Calculator to help you select the best repayment option.
Submit your repayment plan selection before the 90-day window closes.
If you have questions, contact your loan servicer directly or visit studentaid.gov for updated guidance. The Student Debt Crisis Center has also published a library of resources for federal student loan borrowers.
Looking Ahead
The federal financial aid landscape is shifting faster than it has in years. Last Mile will continue to monitor these changes and share timely updates so that our awardees never have to navigate these shifts alone.