Trump's student-loan overhaul takes effect July 1 — but it's not the deadline for borrowers to act on repayment changes

For millions of student-loan borrowers, July 1 is the starting point — not the deadline — to act on repayment changes.

After President Donald Trump's administration eliminated the SAVE repayment plan in March, the Education Department recommended that the 7 million enrolled borrowers switch to a new plan and begin making payments as soon as possible. However, switching before July 1 is not required.

Beginning July 1, the department said it would start sending emails to SAVE borrowers about their timeline for switching plans. Upon receiving this email, which may come later than July 1, borrowers will have 90 days to select a new plan. If they do not select a new plan by the end of the 90-day period, they will automatically be placed in the standard repayment plan, which is the most expensive option.

A notice the department recently sent to SAVE borrowers, reviewed by Business Insider, said that "hundreds of thousands" of borrowers have already switched plans. In a recent court filing, the department affirmed that, because borrowers will be transitioned in waves, some "will get even more time" than the earliest possible transition deadline of September 29.

Trump's student-loan repayment overhaul will bring a host of changes, in addition to the SAVE transition. Also beginning July 1, new repayment plans and borrowing caps will take effect, and borrowers expect to see their monthly bills increase — some by hundreds of dollars.

Ongoing litigation could halt some of those changes. A lawsuit filed in March aims to stop the forced transition of borrowers off the SAVE plan, and a federal judge recently blocked the department's narrowed definition of a professional degree from taking effect July 1, which would have placed lower borrowing limits on some advanced degree programs.

The administration has previously said that these changes are intended to simplify a complex repayment system and curb excessive borrowing.

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