For seniors graduating with student loans as well as college graduates with loans, there are many questions and concerns about federal changes to the student loan program. The Trump Administration’s “Big Beautiful Bill” contained a number of changes to loan repayments for student borrowers.

The changes apply to who took out direct loans. In Maryland, there are 845,000 student borrowers (including those with private loans). The borrowers carry an average student loan debt of $44,500.

Trump Administration Makes it Harder for Students to Get Ahead

There are two repayment tracks for borrowers, one for new borrowers who take out loans after July 1, 2026 and another for legacy borrowers who took out loans before July 1. New borrowers will be limited to two types of repayment plans; the tiered standard plan and the repayment assistance plan (RAP).

The tiered standard plan divides student loan repayments into equal monthly amounts and sets time limits for repayment of the loan ranging between 10-25 years based on the amount owed. Borrowers in this plan are not eligible for Public Service Loan Forgiveness (PSLF).
The RAP plan sets monthly payments based on income. Borrowers will pay between 1-10% of their total adjusted gross monthly income. Most borrowers will pay more than they did under older income-driven repayment plans. Borrowers in the RAP plan are eligible for public loan forgiveness.

Legacy borrowers have different options as a result of changes in President Trump’s Big Beautiful Bill. These borrowers will retain most of their existing payment options although several payment plans including Pay As You Earn (PAYE) and Income Contingent Repayment (ICR) plans will end on July 1, 2028.

Some Good News in Maryland

College graduates in Maryland can obtain some relief through the Student Loan Debt Relief Tax Credit which provides eligible residents a tax break. To apply for the tax credit, complete the application form found here. The deadline to apply is September 15th!
First time homebuyers in Maryland with student debt may also receive a break. The Maryland Smart Buy Program enables first-time homebuyers or homebuyers in certain areas to purchase a home and get up to 15% of the home purchase price to pay down student debt.

If you have questions about your student loan servicer, Public Student Loan Forgiveness (PSLF), or other concerns, you can contact Maryland’s Student Loan Ombudsman at Telephone: 410-230-6077 (Toll-free: 1-888-784-0136) or e-mail: studentloan dot ombudsman at maryland dot gov.