President Trump’s recently passed spending package has implications well beyond the tax code. It will also introduce some major changes for student loan borrowers.
In short, the bill will “roll back student loan protections and cap the amount students can borrow for graduate programs,” said The New York Times, making repayment options and borrowing opportunities fewer. While the changes are projected to result in government savings, there are concerns that they could further reduce college affordability.
Here are some of the major changes to note.
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Repayment plans will be reduced to just two options
The new law “eliminates many loan repayment options for student borrowers, reducing available repayment options from a dozen to two,” said U.S. News & World Report. Borrowers will soon have just two plans to choose from: a standard repayment plan and a new income-driven plan called the Repayment Assistance Plan.
The Repayment Assistant Plan, like existing income-driven plans, is “based on borrowers’ adjusted gross income and number of dependent children,” though it “gives less flexibility on repayment for borrowers in financial difficulty than previous income-based plans and creates a $200,000 federal student loan limit,” said U.S. News & World Report.
Some borrowers will be able to keep their existing payment plan despite the new legislation. However, “those currently enrolled in SAVE, ICR or PAYE plans will have only the two repayment plan options,” as will “borrowers whose loans are dispersed on or after July 1, 2026,” said CNBC Make It.
Lifetime borrowing limits will be reduced for some borrowers
Under the new bill, graduate school, professional program and Parent PLUS loan borrowers will face limits on how much they can take out.
“The move will cap the amount of federal loans students can borrow for graduate school to $20,500 a year — with a total limit of $100,000 — and cap loans for professional programs, such as medical, dental or law school, at $50,000 a year, with a total limit of $200,000,” said NBC News. Previously, the graduate PLUS program allowed borrowers to take out “up to the full cost of attendance for their education,” said Business Insider.
Meanwhile, the Parent PLUS program, which “allows parents to take on student loans for their kids’ educations,” will now have “a $65,000 lifetime cap,” said Business Insider.
Deferment will no longer be offered
Previously, a borrower could “apply for an economic hardship or unemployment deferment, which would allow them to pause their monthly bills and not accrue interest for an allotted amount of time, up to 9 years,” said U.S. News & World Report. That will no longer be an option under Trump’s One Big Beautiful Bill Act.
While forbearance is still available to temporarily pause loan payments, the bill places “new limits” on it, stating that “loans can’t be in forbearance for more than nine months during any 24-month period,” said Forbes.
