(AURN News) — Major changes to the federal student loan system take effect today, and millions of borrowers could soon face higher monthly payments, particularly those in low-income and minority communities struggling with education debt.
Starting today, more than 7 million borrowers enrolled in the Biden-era SAVE repayment plan must switch to a new plan within 90 days or face automatic placement in a more expensive option.
Financial aid experts warn the changes could trigger a spike in loan defaults.
For new borrowers, the changes are even more dramatic. Graduate students can now borrow only $25,500 a year for master’s degrees, down from unlimited borrowing. Law and medical students face $50,000 annual borrowing caps, and the Graduate PLUS Loan program has been eliminated.
Parent PLUS loans are now capped at $65,000 over a borrower’s lifetime. The administration says the caps will pressure universities to lower costs.
Click play to listen to the report from AURN White House Correspondent Ebony McMorris. For more news, follow @E_N_McMorris & @aurnonline.
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