Student Loan Changes After July 1, 2026: What Florida Borrowers Must Do Next
The plan you were on may no longer exist. Here is what ended, what replaced it, and how your loan payment shows up when you apply for a mortgage.
For a lot of families in this community, student loans are not a footnote. They are the monthly payment that shaped when you could buy a home, start a business, or help your own children. And the rules just changed again. If you were on the SAVE plan, you have to pick something new. If you are a parent who borrowed through Parent PLUS, your options are narrower. If you are planning grad school, the borrowing caps are lower. Waiting to see what happens is the one choice that costs the most.
What Changed on July 1, 2026
| What | What changed |
|---|---|
| SAVE plan | Ended. Borrowers on it must switch to another plan. |
| RAP (new) | Payment is a percentage of adjusted gross income, minus $50 a month per dependent. $10 minimum. Unpaid interest is waived when payments are on time. Forgiveness after 30 years. |
| PAYE and ICR | Phase out. Both end July 1, 2028. |
| Grad PLUS | Ended for students starting a program on or after July 1, 2026. |
| New caps | Graduate: $20,500 a year, $100,000 total. Professional: $50,000 a year, $200,000 total. Lifetime cap of $257,500, excluding Parent PLUS. |
| Parent PLUS | Loans not consolidated before July 1, 2026 cannot use an income-driven plan. New Parent PLUS loans can only use the Tiered Standard Plan. |
Rules are detailed and still being implemented. Confirm your own plan options at StudentAid.gov.
How to Choose a Plan Without Guessing
Do not pick a plan based on the lowest payment alone. A low payment that barely touches principal can leave you with a bigger balance for longer. RAP has a feature that waives unpaid monthly interest when you pay on time and can reduce principal by up to $50 if your payment does not. For anyone pursuing Public Service Loan Forgiveness, one detail matters a lot: payments under RAP count, but time in the Tiered Standard Plan does not. And if you take out any new loan or consolidate after July 1, 2026, your repayment choices on all Direct Loans can change. Check with your servicer before borrowing anything new.
The Parent PLUS Trap
This one hits grandparents and parents who sacrificed to put a child through school. If you are a Parent PLUS borrower, talk to your servicer about which plan you are on today and what happens if anything changes. Do not consolidate, take new federal loans, or switch plans without understanding how it affects forgiveness eligibility. A second opinion from a Black-owned financial advisor can save you from an irreversible move.
How Your Student Loans Affect Buying a Home
Here is where plan choice and homeownership meet. When you apply for a mortgage, the lender needs a monthly payment number for your student loans. If you are on an income-driven plan with a documented payment, many programs can use that payment. If your loans are in deferment or forbearance, or your payment shows as zero, some programs apply a percentage of the balance instead. Guidelines differ between conventional, FHA, and VA loans, so there is no single rule. The takeaway: tell your loan officer about your student loans and your plan early, and do not change plans in the middle of an application without asking first. A Black-owned mortgage broker can run the numbers both ways before you commit.
Which Situation Are You In?
Student Loan Action Checklist
Thinking about buying a home with student loans?
Talk to a Black-owned Florida mortgage broker before you change plans or apply.
Find a Black Mortgage BrokerFrequently Asked Questions
Is the SAVE plan still available?
No. The SAVE plan ended, and borrowers who were enrolled must choose a new repayment plan. Check StudentAid.gov or your servicer for the options available for your loans.
What is the Repayment Assistance Plan (RAP)?
RAP is a new income-driven plan where your payment is a percentage of adjusted gross income, reduced by $50 per month for each dependent, with a $10 monthly minimum. Unpaid interest is waived when you pay on time, and forgiveness comes after 30 years of payments.
Did Grad PLUS loans end?
Yes, for students who start a program on or after July 1, 2026. New caps apply: $20,500 a year and $100,000 total for graduate programs, and $50,000 a year and $200,000 total for professional programs.
Does RAP count toward Public Service Loan Forgiveness?
Yes, payments under RAP count toward PSLF. Time in the Tiered Standard Plan does not count.
How do student loans affect getting a mortgage?
Lenders include your student loan payment in your debt-to-income ratio. The payment they use depends on the loan program and your repayment status, so tell your loan officer about your loans and plan early and avoid changing plans mid-application without asking.
This article is educational information, not legal or financial advice. Federal student loan rules are complex and changing. Confirm your options at StudentAid.gov or with a qualified professional.