DETROIT (WXYZ) — New rules involving student loans took effect this month, changing borrowers' monthly payments and how much students can borrow in the future.
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The sweeping changes are part of President Donald Trump's "One Big Beautiful Bill" and are expected to impact millions of Americans. Student debt in the U.S. has reached nearly $1.7 trillion.
"These are the largest changes we have ever seen to the student loan program," Jamie Jacobs, deputy director of Michigan College Access Network, said.
Starting July 1, the Trump administration rolled out new rules surrounding student loans, including eliminating the Biden-era SAVE plan. Those who were enrolled will have 90 days to switch to the tiered standard repayment plan or the new income-driven repayment assistance plan.
"Ultimately, what we're hearing is that those payments are coming back at higher rates than what folks had been paying," Jacobs said. "It may not make sense for folks, what they believe they can pay and I think that's the concern of many Americans and Michiganders. But ultimately, it's all under the goal of paying back more loans faster."
Another change involves borrowing caps for future students. Those earning their master's degree can now borrow $20,500 a year or $100,000 in total. Professional students can borrow $50,000 a year or $200,000 total. Parent PLUS loans also have a lifetime cap of $65,000.
"Because of Michigan's huge investment in the last five years in state financial aid, we are one of the state's impacted slightly less, just given that our students take less federal loans but nonetheless, changes that folks will see and will experience," Jacobs said.
To help borrowers navigate the changes, Wayne County has a partnership with the platform Savi to provide residents and employees with free loan support services.
"They are looking into getting in the right program and the right plan," Donna Wilson, with the Wayne County Executive's Office, said. "A five minute conversation has really benefited a lot of employees and a lot of residents."
One of those assisted by the partnership is Mike Makki, who has helped manage loans for his children and himself.
"We had to all go get on a payment program moving forward as of July 1, when SAVE went away. And we were able to do that," Makki said.
Colleges such as University of Detroit Mercy say they have received plenty of questions regarding borrowing limits and are walking families through their options.
"My team comes to me daily, constantly asking like this is what the student is saying. Is that what that means," Jessica Rouser, director of financial aid at University of Detroit Mercy, said.
Students and borrowers are encouraged to reach out to financial aid advisers and school counselors before choosing a plan or taking out a loan.
"Don't make a fear-based decision on unknowns," Jacobs said.
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