On Tuesday, July 1, various changes to federal student loans officially took effect even though the new fiscal year begins on Oct. 1.

According to U.S. News and World Report, the Education Department (ED) made the changes take affect ahead of the new fiscal year to give schools plenty of notice. Since some of the changes have to do with interest rates, the ED is giving a grace period for schools to raise questions and concerns.

Per U.S. News and World Report, here are the four major changes to student loans for the upcoming academic year.

1. Interest Rates

In the 2013-2014 academic year, undergraduate students borrowed at a rate of 3.86 percent for direct subsidized and unsubsidized Stafford loans. After a bipartisan bill tying interest rates to the market passed, interest rates will jump to 4.66 percent for the 2014-2015 academic year.

Under the new bill, federal student loan interest rates have to remain the same for a full year. The highest the rate for undergrads can climb is 8.25 percent.

2. Closed School Discharge

If a school shuts down within 120 days after a student enrolls, that student may be eligible to have his or her student loans dismissed. Previously, the timeframe was 90 days. The school would have to close and not offer an alternative way for its students to continue their education.

3. New Income-Based Repayment Plans for New Borrowers

Thanks to President Barack Obama's recent executive order, borrowers of older student loans to participate in the Pay As You Earn program. Previous income-based repayment plans capped loan payments at 15 percent of one's monthly earnings. Now, that figure drops to 10 percent and applies to new borrowers.

4. Federal Loan Default Relief

Borrowers will now be able to rehabilitate or consolidate any loans in default status. The rehabilitate a loan, the borrower has to make nine consecutive payments on time at a monthly amount agreed to by both parties. If the monthly payments are too high, lenders will be able to take into account more of a borrower's financial situation.