New Student Loans Law takes Affect

CHATTANOOGA, TN.- Over 250 new state laws take effect in Tennessee on July 1st. One of those laws bringing major changes to student loans. Under the “One Big Beautiful Bill”, this law will affect current and incoming college students. These changes cap how much money can be borrowed for graduate and parent loans. 

“So what the new law does is it reduces your options basically to two choices if you take out a new loan after today, you have two choices of repayment when it’s called a standard plan and that’s just based on the size of the loan depending on how big it is you have between 10 and 25 years to pay it off and it’s really pretty straightforward. Maximum is 25 the bigger loans the other program that’s brand new is called the repayment assistance plan, or the RAP plan that one’s based on income.” says Chris Hopkins, CEO of Apogee Wealth Partners.

This law will apply to incoming college students who will be looking to take out loans to pay for school. However, we learned how this will affect those already in school and on a previous payment plan. 

“You have a two year transition. If you’re on one of those earlier income base plans that are gonna go away they’re gonna go away now on July 1 of 2028, so you have two years of grace period. You can stay in the same plan for now but by that period of time and I suggest earlier than that, you’re gonna have to pick one of these two standard options and transition into that.”  says Chris Hopkins, CEO of Apogee Wealth Partners.

Because of this new adjustment that college students are going to have to make, many are wondering what the needed steps are for the future.  

“So how do you know what your options are what works for you well, the first thing to do is to go out to the department of education go to their website and they have a calculator that’ll help you decide which of these plans suits you the best so you can plug in all your information and it’ll spit out a recommendation or a rescheduling from that you can help to pick which one is best for you. It’s also really important for any anybody who has an outstanding loan. Make sure you know who your loan service is.” says Chris Hopkins, CEO of Apogee Wealth Partners.

If you are currently paying student loans, the most important thing that you need to do is take action. But, Undergrad students will not be the only ones affected by this. 

“Grad students could borrow essentially unlimited amount up to the cost of their education so a medical student could borrow 400 grand whatever it took and now we have new limits imposed on that so the graduate limit for the standard borrowing plan is $100,000 in your lifetime there’s also like a $25,000 annual cap, but hundred grand total in your lifetime.”  says Chris Hopkins.

If you are currently or plan to take out student loans make sure to do your research and choose what works best for you.