On Thursday, President Donald Trump's Department of Education announced its final rule for its student-loan repayment overhaul, which includes new borrowing caps and repayment plans that will go into effect on July 1.
Nicholas Kent, the department's undersecretary, told reporters on a press call that the final rule includes four key provisions: the elimination of the Grad PLUS program, new loan limits for graduate and professional students, allowing schools to establish their own loan caps "that match the true value" of the programs they offer, and the creation of two new repayment plans.
"Collectively, our changes will ensure students continue to have the access that they need for federal student loans, while helping prevent borrowers from taking on unmanageable debt levels that they may never be able to repay," Kent said.
The changes stem from Trump's "big beautiful" spending legislation, and were negotiated with stakeholders, including industry representatives and borrower advocates, at the end of 2025.
The new borrowing caps are among the most discussed changes in the overhaul. The Department of Education is setting a $100,000 lifetime cap for graduate students and a $200,000 cap for professional students, and it narrowed the definition of "professional" to 11 programs, including law, medicine, and dentistry. That means previously eligible programs, like postgraduate nursing, are no longer eligible.
Some students and advocates have raised concerns that the caps could push students to seek additional financing in the private lending market or forgo their programs altogether.
Additionally, the department is capping Parent PLUS loans for the first time, which allows parents to borrow the full cost of attendance for their kids' programs. The new cap for parent borrowers will stand at $20,000 annually.
The department will also be rolling out a new Repayment Assistance Plan, replacing existing income-driven repayment plans, including the SAVE plan, which the administration is eliminating. RAP would waive unpaid interest and set monthly payments at a minimum of $10, which is less generous than the terms of existing plans. This will increase borrowers' monthly payments, according to Federal Student Aid projections, sometimes by hundreds of dollars.
Have a story to share about student loans? Contact this reporter at asheffey@businessinsider.com.
Jatee Kearsley built Je T'aime Patisserie in Bed-Stuy, Brooklyn, with a mission to make high-quality French desserts accessible to everyone, including customers who pay with EBT.
A self-taught pastry chef who learned from YouTube and years of industry work, Kearsley went from losing money to tripling her sales after going viral. Despite the high ingredient costs, steep New York City rent, intense pressure, and emotional burnout, Kearsley has been dedicated to prioritizing community over profits.
Over 7 million borrowers who were enrolled in former President Joe Biden's SAVE student-loan repayment plan will soon have to transfer to a new plan after a court approved President Donald Trump's legalsettlement to eliminate SAVE.
While the Department of Education has not yet released its guidance on next steps for SAVE borrowers, the transition is set to be a major operational task for federal student-loan servicers. That could be a problem given diminished servicer oversight, a recent report from the Government Accountability Office said.
In addition to the lack of oversight, the Department of Education announced on March 19 that it would begin moving defaulted student-loan borrowers' accounts to the Treasury Department in a new partnership — part of the Trump administration's broader goal to dismantle the Department of Education. Borrower advocates said the move could put millions of accounts at risk of payment errors.
The GAO's report, released in early March, found that the department's Federal Student Aid office stopped assessing the five major federal student-loan servicers on accuracy and call quality in February 2025. The lack of oversight leaves FSA without assurance that servicers are billing borrowers correctly and providing them with accurate information.
"FSA is missing opportunities to ensure that servicers are providing borrowers complete and accurate information as it implements major statutory changes to student loan repayment options affecting millions of borrowers," the report said. Advocates pointed to the elimination of SAVE as a reason the discontinued oversight could harm borrowers.
Aissa Canchola Bañez, policy director at advocacy group Protect Borrowers, said in a statement that the GAO's report "could not come at a worse time, as millions of SAVE borrowers will be forced out of their repayment plan and have no other choice but to rely on their servicer to maintain access to an affordable repayment option."
The SAVE plan, introduced by Biden in 2023, intended to give borrowers cheaper monthly payments with a shorter timeline to debt relief. It's been blocked since the summer of 2024 due to litigation. While Trump's "big beautiful" spending legislation planned to phase out SAVE by 2028, the approved settlement eliminates it ahead of schedule.
It's not only SAVE borrowers — federal servicers will have to oversee the creation of new repayment plans from Trump's spending bill. It includes a standard repayment plan and a new Repayment Assistance Plan, which would allow for forgiveness after 30 years of payments. Rep. Bobby Scott, top Democrat on the House education committee, said in a statement that the GAO report should serve as a "flashing red warning sign about what is to come" as the administration implements the federal repayment overhaul with diminished servicer oversight.
Richard Lucas, acting chief operating officer of FSA, said that the agency has other metrics it uses to evaluate servicer performance, including through surveys that "score the servicers' performance across five measures each for borrower communications, contact center, and website support, as well as six measures for the servicers' management of loans."
It's unclear how soon SAVE borrowers will be required to transition to a new plan and likely face higher monthly payments. The settlement said that the Department of Education would not enroll any new borrowers in SAVE and would deny all pending applications while it moves forward with the repayment changes.
Two consumer bankruptcy attorneys said they're seeing more young clients.
Catherine Falls Commercial/Getty Images
Two consumer bankruptcy attorneys said they're seeing more younger clients.
The lawyers cited rising living costs and stagnant wages as drivers of the trend.
They also said they're seeing more clients with massive debt, thanks to online gambling.
For some young adults crushed by heavy debt loads, bankruptcy has emerged as an escape hatch.
Two consumer bankruptcy attorneys told Business Insider they've seen a noticeable uptick in Gen Z and young millennial clients, ages of 25 and 35, in recent years — with one saying their share has increasedseveralfold.
The lawyers pointed to soaring living costs, lagging wages, and the ease of racking up credit card debt as key forces behind the trend. Factors like buy now, pay later loans and online betting are accelerating the rate at which some young people spiral into debt, they said.
"We're definitely seeing more young filers, and it's not because they're irresponsible," said Florida bankruptcy attorney Chad Van Horn. "It's because they entered adulthood during one of the most financially distorted environments in decades."
Personal bankruptcy filings in the United States have been on the rise since their COVID pandemic-era low in 2022. Still, they remain far short of the post-Great Recession peak in 2010, when cases topped about 1.5 million.
More than 533,000 individual bankruptcy cases were filed last year, according to the American Bankruptcy Institute, citing data from Epiq Bankruptcy Analytics.
Nearly 333,000 of those 2025 filings were Chapter 7 cases — the most common form of personal bankruptcy — which can erase most unsecured debts, including credit card balances or medical bills.
Chapter 13 filings, which involve a repayment plan to pay down some or all debts, accounted for just over 200,000 cases.
"What we're seeing is sort of the hangover from several years of government stimulus and all the various economic things that have driven up costs and expenses while keeping wages fairly flat," said Ed Boltz, a North Carolina bankruptcy attorney.
High consumer debt for young filers
Although there's no comprehensive, official data source tracking the ages of bankruptcy filers in the US, both Boltz and Van Horn said young adults are now showing up in greater numbers than before, pushing Van Horn's firm to rethink how it markets to clients.
"It's extremely surprising," said Van Horn, adding that 30% to 35% of his firm's roughly 4,000 clients last year were between the ages of 25 and 35. Historically, he said, that age group made up just 5% to 10% of the caseload.
The surge in younger clients has forced Van Horn's law firm to change its marketing strategy, the attorney said.
"We need to be where the 25 to 35 year olds are because they're not necessarily in the same place that the 55 year old is getting their information from," said Van Horn.
As Business Insider has previously reported, a wave of recent TikTok videos shows young people championing bankruptcy as a way to wipe out massive amounts of debt. Some called bankruptcy the "best" decision they've ever made.
Boltz said his firm handled about 2,000 bankruptcy cases in 2025, with about 20% of clients in the 25 to 35 range. He noted that it's unclear whether young adults now represent a larger share of filers overall or whether the increase reflects the broader rise in cases.
Even so, Boltz said his firm has seen the greatest growth in bankruptcy filings from young adults and seniors in recent years.
Young filers often carry significant student loan debt, which is generally not dischargeable in bankruptcy. They also face escalating housing and living costs that put more strain on their budgets, the attorneys said.
Ready access to credit cards, personal loans, and buy now, pay later programs has compounded the problem, making it easy for young people to rack up debt quickly, they said.
"That formula is just a bad formula for Gen Z," said Van Horn, who explained that many once relied on gig work to close budget gaps. "But a lot of them are burning out, and that work isn't paying what it used to."
He said substantial consumer debt is a common factor among his younger clients. And for some, online sports betting has become a major contributor to that debt.
Gambling debts are also on the rise
Both Van Horn and Boltz told Business Insider that they've been seeing a growing number of young clients — men in particular — with tens of thousands of dollars in credit card debt accumulated through online gambling.
"The gambling is really the one that has in the last year, year and a half, really taken off," Boltz said, adding, "We've started to see people with $20,000, $30,000, $40,000 of fairly rapid credit card that they've incurred" through online betting.
Van Horn said he's increasingly seen younger people get "addicted to gambling," a trend he believes is being amplified by a culture of FOMO or fear of missing out.
It's the idea, he said, that "everybody's making money, everybody's having fun" and then "you get involved, and you lose all your money."
Popular sports betting companies like DraftKings and FanDuel have recently stopped accepting credit card deposits for bets. DraftKings ended the practice in August, and FanDuel followed earlier this month.
The crypto-based prediction market Polymarket has allowed users to fund their accounts with credit cards since 2024.
"We are seeing a lot more where we have clients who are very young, mid 20s, early 30s, who overwhelmingly tend to be men, who have run up pretty massive credit card debts gambling," said Boltz.
"The apps are explicitly designed to part you from your money."
Are you a young person who has filed for bankruptcy or is considering filing for bankruptcy? Contact this reporter via email at nmusumeci@businessinsider.com.
I studied at universities in both the US and China, first in 2015 and again in 2025.
Experiencing Chinese higher education at two different times showed me how different the system is.
The differences in cost, campus culture, and career pathways made me rethink American universities.
I've done something quite rare: I'm an American who attended college in both the US and China.
I completed my undergraduate degree in political science at a state university in New York and studied abroad in Wuhan, China, during the summer of 2015. Ten years later, in 2025, I returned to Shijiazhuang, China, while completing my second graduate degree in global health, interning at a medical university.
Experiencing Chinese universities at two distinct points in my life, a decade apart, gave me a rare view of how the system operates and how it has evolved.
I didn't meet any Americans studying in China most recently
During my first trip, I was in a group of about 30 American college students. The second time, I was the only person from my cohort to go.
Since the pandemic, the number of US students in China has dropped, according to NPR. In fact, I didn't meet a single American in the three months I was in the country most recently.
Both times, I met lots of African students, though. They were heavily invested in and integrated into the Chinese learning and working systems.
I've noticed China sets the international students I met up for success
Many of the international students I talked to in the US told me how hard it was to integrate and find a pathway to work after school in New York.
In China, I noticed there's a pathway for international students who want to stay, particularly those who have developed strong Mandarin skills.
The Chinese government and universities are actively trying to entice international students to come to the country, while also investing in ways to retain graduates.
Campus life looks very different from what I experienced in the US
The internet firewall in China can make research difficult, and I've seen doctors smoking in classrooms between lectures.
Student life also reflects a different set of norms. There is low tolerance for drugs and alcohol on many Chinese campuses. After class, I saw friends playing badminton rather than drinking beer.
Technology and security are also visible on campus. Students on the campuses I studied entered by scanning their faces and were tracked by cameras.
The author worked with many Chinese students.
Courtesy of Catherine Work
Politics also felt more openly present in academic life. Most of the professors and physicians I worked with were active members of the Communist Party and often wore pins on their lapels to signify it.
As one local friend put it, "having one state party means policies don't change every four years," which, in their view, can create a certain level of stability for universities.
Chinese universities are far cheaper and more specialized
The two universities I studied at in China didn't have the fancy sports facilities most American colleges do, but many students I met weren't going into debt to study either.
Tuition in China is subsidized by the government, especially at public universities. That means it's relatively affordable compared with many Western countries.
Housing and food costs are also inexpensive in my experience. I was eating a healthy lunch on campus for $1 a day. My American campus used to sell a single banana for $1.05 in 2015.
I also spent a year taking general courses in America. While I loved taking a class on Bollywood as a political science major, the specialization offered by many Chinese universities helped better prepare me for the real world. I also saved money by not taking general courses while in China.
Studying in both systems changed how I think about education
I didn't just earn my degrees in multiple countries; I learned about the culture of education. I learned how the government impacts who can study what and if they will be successful.
I'll always be partial to the American scholastic mentality of questioning everything and forming opinions, rather than the rote memorization I saw in China, but I'd prefer not to be launched into the working world with so much student loan debt.
I hope more Americans can form their own opinions of China's educational system, which has rapidly evolved and will only continue to grow in its unique way.
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