The nearly 7 million borrowers enrolled in the Biden-era repayment program known as SAVE will have 90 days to switch to a new repayment plan. New borrowers will choose between the Repayment Assistance Plan, known as RAP, and the Tiered Standard repayment plan.
Bryan Taylor, director of student financial services, said repayment decisions will depend on each borrower's financial situation.
"It depends on what your amounts look like, it depends on what options you're going to be comfortable so like can I afford something that's a fixed amount in a 10-25 year range or can I afford something different so every student is going to be different," Taylor said.
The U.S. Department of Education says phasing out other repayment plans will provide borrowers with a smoother and more simplified repayment process.
However, student loan advocates have warned that monthly payments under the RAP plan will be higher.
At Fresno Pacific University, officials are working with students to determine which repayment options best fit their individual circumstances.
"If we can help them with institutional aid which is really important for us to offset loans with institutional aid and then also encourage them to only take out the amount that they need will help them as they're choosing between these options to be able to pay responsibly later," Taylor said.
Additional changes taking effect Wednesday include new borrowing limits for graduate and professional students. Under the new rules, those students will be capped at borrowing between $100,000 and $200,000.
Before the new limits, students could borrow up to the cost of their tuition and fees.
Clare McCann, policy director at the Postsecondary Education & Economics Research (PEER) Center, said the borrowing caps could affect access to graduate education.
"Those students are going to be forced to look for alternate sources of financing, forced to borrow less, or may end up forgoing graduate education altogether," McCann said.
The U.S. Department of Education argues the new borrowing caps will "curb excessive borrowing and force institutions to evaluate their costs."
As the changes take effect, borrowers and educational institutions are evaluating how the new repayment options and borrowing limits could affect students' financial decisions moving forward.
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