The Changes, Which Took Effect July 1 Under the One Big Beautiful Bill Act, Narrowed Repayment Options and Ended the Biden-era SAVE Plan

New federal student loan rules could create risks for older borrowers who depend on Social Security, experts say. The changes, which took effect July 1 under the One Big Beautiful Bill Act, narrowed repayment options and ended the Biden-era SAVE plan. While Social Security checks won't be automatically reduced, fewer income-driven plans could push some borrowers into default, making them vulnerable to Treasury offsets that can tap benefits.

"Federal student lending is moving toward a system that emphasizes consistent repayment and clearer rules over forgiveness, said Alex Beene, a financial literacy instructor at the University of Tennessee at Martin. Borrowers with new loans must choose between the Repayment Assistance Plan and a tiered standard plan, while PAYE and ICR are being phased out by 2028. Parent PLUS borrowers face particular risk, as their debt remains in their name into retirement. "Parents who borrowed on behalf of their children through the Parent PLUS program could eventually see defaulted loans become subject to the Treasury Offset Program, said Kevin Thompson, CEO of 9i Capital Group. If borrowers fail to remain in good standing once these protections expire, collection efforts could resume.