Student loan borrowing is 'high stakes' as new rules take effect on July 1, CFP says. What to know

Vladimir Vladimirov | E+ | Getty Images Student loan borrowers who take certain steps will soon face fewer repayment and debt forgiveness pathways, due to President Donald Trump 's One Big Beautiful Bill Act . "Be very careful when it comes to taking out new student loans," said Landon Warmund , a certified financial planner and certified student loan professional at Reliant Financial Services in Kansas City, Missouri. That's because those who borrow federal student loans after July 1 will go from a "legacy borrower" to a "new borrower," subject to a heap of different rules included in the legislation passed last year, said Kathleen Boyd, a CFP and founder of Student Loan Savvy in San Diego. It's "really high stakes stuff," Boyd said. Here's what to know. New borrowing affects older student loans The OBBBA eliminates several of the U.S. Department of Education's student loan repayment plans. Existing borrowers will maintain access to some of those plans, including the favorable Income-Based Repayment plan, or IBR, Boyd said. However, anyone who borrows a federal student loan after July 1 will be left with just two new repayment options across all of their debt, even their older loans: the Repayment Assistance Plan, or RAP, and the Tiered Standard Plan. "Even a small undergraduate or Parent PLUS loan after July 1 is enough to eliminate your opportunity to repay under your current desired plan," said Warmund, a member of CNBC's Financial Advisor Council .