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New Loan Caps and Collections Threaten Borrowers' Stability

12/24/2025

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Summary

Story summary

Starting July 1, 2026, graduate students face an annual loan cap of $20,500 as part of a broader federal loan overhaul.
The federal government will resume student loan collections in January, including wage garnishment for borrowers in default.
The Biden-era SAVE Plan will end, affecting about 7 million borrowers.
Experts warn these changes could raise defaults, with more than 12 million borrowers delinquent or in default.

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Story summary

Starting July 1, 2026, graduate students face an annual loan cap of $20,500 as part of a broader federal loan overhaul.
The federal government will resume student loan collections in January, including wage garnishment for borrowers in default.
The Biden-era SAVE Plan will end, affecting about 7 million borrowers.
Experts warn these changes could raise defaults, with more than 12 million borrowers delinquent or in default.