Federal Student Aid Right Now: Your Own SAVE Deadline, an Auto-Pay Rate Cut by Sept. 30, and New Borrowing Caps

Millions of federal student loan borrowers are on a deadline this summer, and for many of them it is a personal deadline that no one else shares. Since July 1, 2026, loan servicers have been mailing borrowers in the SAVE repayment plan — short for Saving on a Valuable Education — individual notices that start a 90-day clock to pick a new plan. A separate, fixed deadline applies to many other federal borrowers: enroll in auto pay by September 30, 2026, and the rate on eligible Direct Loans drops by a full percentage point through June 30, 2028.

Those two clocks are only the start. Loans are being erased for about 170,000 defrauded borrowers, and a court has let that stand. New borrowing caps took effect July 1. And a rumor that StudentAid.gov went down this week remains unconfirmed. Here is each piece, and what to do about it.

Key facts

SAVE plan: your own 90-day window to choose a new plan starts on the date printed on your notice. Servicers are mailing them on a rolling basis from July 1, 2026 through March 2027.
Auto pay: enroll with your servicer by September 30, 2026 for a one-percentage-point interest rate cut, running July 1, 2026 through June 30, 2028. It applies to federal Direct Loans dating from around July 1, 2012 onward, including Parent PLUS; if your loan is from that period, ask your servicer.
Borrowing caps, as of July 1, 2026: Grad PLUS is gone for new graduate and professional borrowers; new graduate students are limited to $20,500 a year and $100,000 total in Direct Unsubsidized loans; new professional students are capped at $50,000 a year and $200,000 total; new-borrower Parent PLUS is capped at $20,000 a year per dependent student, with a $65,000 lifetime limit per dependent student.
Fraud discharges: about 170,000 borrowers were sent discharge notices on March 30, 2026, and about 30,000 more in mid-June. On July 17, 2026 the Ninth Circuit refused to reopen the settlement. No application is needed.
Where to get help: Federal Student Aid Information Center, 1-800-433-3243; customerservice@studentaid.gov; FSA Ombudsman, 877-557-2575.

If you were on the SAVE plan, watch your mail

The SAVE plan was ruled unlawful and is being shut down. The Education Department’s servicers began sending affected borrowers formal notices on July 1, 2026, and will keep sending them on a rolling basis through March 2027. Each notice starts that borrower’s own 90-day window to choose a new repayment plan — so there is no single national deadline, and a neighbor’s letter tells you nothing about yours. Your own 90 days run from the date printed on your notice. If you are not sure whether your letter has already gone out — or it came and you no longer have it — do not wait on the mail: call the Federal Student Aid Information Center at 1-800-433-3243 and ask where you stand.

Borrowers who let the window pass are automatically enrolled in either the Standard Repayment Plan or the new Tiered Standard Plan, which has been available since July 1, 2026. A new Repayment Assistance Plan is also on the menu. The official announcements do not spell out how the three plans compare in monthly cost, so ask your servicer to run the numbers for your specific loans. Picking a plan yourself before the clock runs out is the only way to make sure you end up on the one that fits your budget, rather than the one assigned by default.

Join auto pay by September 30 for a one-point rate cut

The Department announced in June 2026 a temporary interest rate reduction of one percentage point for borrowers enrolled in automatic payments. To be clear about what that buys you: the interest rate itself goes down by one point — a loan charging 6.5% would charge 5.5% — which is not the same as your monthly bill shrinking by 1%. The reduction started July 1, 2026, and runs through June 30, 2028. It applies to federal Direct Loans dating from July 1, 2012 onward — including Parent PLUS loans. The official wording of that cutoff moves between when a loan was made and when its money was first paid out, so if your loan dates from right around that summer, ask your servicer which side of the line it falls on.

The catch is the enrollment deadline: you must be signed up for auto pay with your loan servicer by September 30, 2026. If you already pay automatically, you do not need to do anything. If you don’t, contacting your servicer before the end of September is the quickest money-saving move available to borrowers whose loans qualify.

New borrowing caps took effect July 1

The One Big Beautiful Bill Act, signed in July 2025, rewrote the federal loan limits as of July 1, 2026:

Grad PLUS is gone for new borrowers. Graduate students who haven’t borrowed before are now limited to $20,500 a year and $100,000 total in Direct Unsubsidized loans.
Professional students who haven’t borrowed before are capped at $50,000 a year and $200,000 total.
Parent PLUS is capped for new borrowers at $20,000 a year and $65,000 over a lifetime, both figures counted per dependent student. Parents who were already borrowing before July 1, 2026, keep the old cost-of-attendance-based limits for a limited grandfathering window. Before the change, parents could borrow up to the full cost of attendance, so families at higher-cost schools may find Parent PLUS no longer covers the bill on its own.
A grandfathering window softens the change. Students who received a Direct Loan disbursement before July 1, 2026, and stay in the same program at the same school can keep borrowing under the old rules for up to three more academic years or until they finish, whichever comes first.

One group this list does not name is undergraduates borrowing in their own name. If that is you, your school’s financial aid office can confirm your annual limit for this year.

What the same law did to Pell Grants

The same law also reshaped Pell Grants, starting with the 2026-27 award year. It tightened eligibility in two ways. First, a cutoff: if your FAFSA-calculated Student Aid Index comes in at about $14,790 or higher — roughly twice the $7,395 maximum grant — you no longer qualify. Second, students whose scholarships already cover their full cost of attendance no longer qualify either. And it expanded eligibility, opening Pell Grants to approved short-term job-training programs for the first time.

About 170,000 defrauded borrowers get their loans erased automatically

Sweet v. McMahon is a settlement covering borrowers who said their schools defrauded them. The order of events matters here, so take it in sequence. The settlement gave the Education Department firm deadlines to decide those borrowers’ claims, and the Department missed them — which, under the settlement’s own terms, automatically triggered full relief. Roughly 170,000 borrowers were sent discharge notices on March 30, 2026, and a further group of about 30,000 was notified in mid-June. The Department then went to court to try to reopen the settlement. On July 17, 2026, a three-judge panel of the Ninth Circuit Court of Appeals unanimously said no — so the ruling did not start the discharges; it protected discharges that were already in motion.

If you received one of those notices, you do not need to apply for anything or file anything. The one-year clock in the notices belongs to the government, not to you: the Department has up to one year from the date on your notice to actually erase the loans. If that year passes and your balance is still there — or you believe you qualify but never got a notice — call the FSA Information Center, and if that does not resolve it, take a formal dispute to the FSA Ombudsman — both numbers are at the end of this article. Forbes reported that the appellate ruling covers more than 500,000 applicants in all, and the settlement as a whole is described as worth about $23 billion in discharges, refunds and other relief.

No, there is no confirmed StudentAid.gov outage

Rumors spread this week that studentaid.gov went down on August 5. As of August 6, 2026, there is no confirmation: no official statement, no major news report, and independent uptime monitors showed the site responding normally on August 4, 5 and 6. A widely resurfacing story about mass Education Department layoffs followed by an hours-long StudentAid.gov outage is real — but it happened in March 2025, nearly a year and a half ago, and it is a separate event. If the site won’t load for you, try again later or call the Federal Student Aid Information Center.

Further out: an earnings test for degree programs

A new accountability rule published July 1, 2026, will eventually cut off federal Direct Loans to degree programs whose graduates earn too little — undergraduate programs must show completers out-earn typical high-school-diploma holders, and graduate programs must beat typical bachelor’s-degree earnings. A program that fails in two of three consecutive years loses loan eligibility. Programs that can’t show graduates end up better off “should not be underwritten by federal taxpayers,” Under Secretary of Education Nicholas Kent said.

None of that bites yet. The rule takes effect July 1, 2027, the first earnings calculations are expected that year, and for most programs, loan access could not be lost before 2028 at the earliest.

If your aid hasn’t shown up yet

Fall financial-aid money lands at many colleges in mid-to-late August, and most schools release it no earlier than 10 days before classes start — a short wait near the start of term is usually normal, not a system failure. Your school’s financial aid office is the first call for any disbursement problem.

One common snag this year: a fraud-screening system launched in April 2026 placed roughly 300,000 of this year’s FAFSA (forum thread titled ‘Is Federal Student Aid) applications into extra identity verification. If you were flagged, follow the instructions in your notice, use a valid, non-expired government-issued photo ID, and work with your aid office — money will not go out while the hold is open. The 2026-27 FAFSA itself has been open since September 2025.

If a FAFSA correction won’t go through, wait until the original form is processed, then use “Make Corrections” at studentaid.gov; changes typically take three to five business days. For problems no one resolves, call the FSA Information Center at 1-800-433-3243, email customerservice@studentaid.gov, or take a formal dispute to the FSA Ombudsman at 877-557-2575.