What's happened
Major changes to US student loan programs are underway in 2026, including new repayment plans, borrowing caps, and the phase-out of existing programs like SAVE and PSLF. Wages may be garnished for defaulted loans, affecting millions amid ongoing legal and policy shifts, with significant implications for borrowers and policymakers.
What's behind the headline?
The 2026 reforms mark a significant shift in US student loan policy, with the phase-out of popular programs like SAVE and PSLF, and the introduction of stricter borrowing caps and new repayment plans. These changes will likely increase financial pressure on borrowers, especially those in default or nearing forgiveness thresholds. The decision to resume wage garnishments signals a tougher stance on defaulted loans, despite criticism from advocates who argue that the government has failed to provide sufficient support or affordable options. The legal and political battles surrounding these policies reveal a broader debate over the government's role in student debt relief and the fairness of repayment structures. Ultimately, these reforms will deepen the financial strain on many borrowers, potentially leading to increased defaults and economic hardship, unless further support measures are introduced.
What the papers say
The New York Times highlights the ongoing uncertainty and the backlog of applications, with experts warning of a wave of defaults amid rising costs and job market instability. Business Insider UK emphasizes the legal and political controversy, noting that the Department of Education's wage garnishment plans will affect thousands, with critics arguing that the government is prioritizing debt collection over borrower support. Both sources underscore the complex and contentious nature of the 2026 reforms, reflecting a broader debate over student debt management and economic impact.
How we got here
The US government has been reforming student loan policies since 2025, with legislation signed by President Trump to introduce new repayment plans, borrowing caps, and eliminate existing income-driven plans like SAVE. The expiration of the tax-free forgiveness provision from the American Rescue Plan in 2026 further complicates the landscape, while the Department of Education has been working through a backlog of applications and legal challenges to existing programs like PSLF.
Go deeper
Common question
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What Do Recent US Student Loan Reforms Mean for Borrowers?
The US government has introduced significant changes to student loan policies starting July 2026. These reforms include new repayment options, borrowing caps, and the phase-out of existing programs like SAVE and PSLF. With wage garnishments resuming and legal challenges ongoing, many borrowers are wondering how these changes will affect them. Below, we answer the most common questions about these reforms and what they mean for student loan borrowers today.
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What Are the Major Changes in US Student Loans in 2026?
The US student loan system is undergoing significant reforms in 2026, affecting how borrowers repay, borrow, and access forgiveness programs. With new repayment plans, borrowing caps, and stricter debt collection measures, many are wondering what these changes mean for their financial future. Below, we explore the key questions about these reforms, how they impact borrowers, and what legal debates are shaping the future of student debt in America.
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