Significant revisions to federal student loan law, under the One Big Beautiful Bill Act, will take effect on July 1, dramatically impacting current and prospective borrowers. Key changes include new borrowing caps: parents can borrow a maximum of $20,000 annually and a total of $65,000 per student under the Parent PLUS program, while the Grad PLUS program has been completely eliminated. Graduate students will now face borrowing limits of $20,500 annually and $100,000 total.
Part-time students will see reduced loan amounts based on their enrollment status. For those borrowing after July 1, a lifetime loan limit of $257,000 will be established. Additionally, existing borrowers will keep their current repayment plans, but two income-based repayment options will be phased out by 2028, requiring borrowers to transition to different plans.
Experts advise current loan holders to stay informed about these changes, and to communicate with their loan servicers, keeping detailed records of all interactions.
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