Trump's Student Loan Overhaul: What You Need to Know

The Department of Education has published a proposed rule on student-loan repayment changes, marking a key step towards implementing sweeping student-loan changes this summer. The proposed rule includes new borrowing caps, the elimination of existing income-driven repayment plans, and a new repayment plan with less generous terms.

The new Repayment Assistance Plan would set borrowers' payments at 1% to 10% of their income, with any remaining balance forgiven after 30 years. This is less generous than the SAVE plan, which allowed for lower monthly payments and forgiveness after 10 years.

The proposed rule also places new borrowing caps on graduate and professional degrees and eliminates the Grad PLUS program. Additionally, borrowers in default will be allowed to rehabilitate their loans twice, rather than just once.

The public has 30 days to comment on the proposed rule, which may lead to changes before the final rule is implemented in July. It's essential for borrowers to understand how these changes may impact their finances and plan accordingly.