After a marathon of overnight voting and intense intra-party negotiations, the Republican-controlled Congress has passed the long-anticipated “Big, Beautiful Bill” championed by President Trump. The sweeping legislation, signed into law on July 4, introduces significant changes across key policy areas—including taxation, defense, immigration, healthcare, and education.
One of the bill’s most consequential changes involves a complete restructuring of the federal student loan system, aimed at curbing government spending to offset substantial tax reductions. Although initial proposals varied between the House and Senate, lawmakers ultimately reached a compromise that is now law.
New Borrowing Limits (Effective July 1, 2026):
- Graduate students: $20,500 annually, $100,000 lifetime cap
- Professional students: $50,000 annually, $200,000 lifetime cap
- Parents (combined per student): $20,000 annually, $65,000 lifetime cap
- Lifetime borrowing cap for all students: $257,000
- Grad PLUS and Parent PLUS programs: Eliminated
- Undergraduate annual borrowing limits: Unchanged
Repayment Changes: Starting July 1, 2026, all existing income-driven repayment (IDR) plans will be discontinued for new borrowers. Instead, two new plans will be introduced:
- Standard Repayment Plan: Payment periods range from 10 to 25 years, depending on the original loan balance
- Repayment Assistance Plan (RAP): Payments set at 1% to 10% of income, with remaining balance forgiven after 30 years
Current borrowers can remain on existing repayment plans through July 1, 2028, after which they will be transitioned to RAP or a revised version of the Income-Based Repayment (IBR) plan.
See the table below for more: