President Trump’s massive new budget package—known as the “One Big Beautiful Bill”—is poised to overhaul federal student loans in ways that could limit access to graduate education and increase costs for millions.
Major student loan changes
Following passage in both chambers of Congress, the bill now awaits Trump’s signature. Among the most dramatic education provisions:
- Loan Caps:
- Graduate students: $20,500 annually, $100,000 lifetime
- Medical and law students: $50,000 annually, $200,000 lifetime
- Parent PLUS loans: $65,000 lifetime cap
- Loan Program Eliminations:
- The government will phase out the federal Grad PLUS loan program starting July 2026.
- Repayment Overhaul:
- Only two plans remain: a standard 10–25 year fixed plan and a new “Repayment Assistance Plan” based on 1–10% of discretionary income.
- The government will discontinue loan forgiveness programs, including many tied to income-driven repayment.
Who’s affected?
- Most changes will hit new borrowers after the law takes effect in 2026.
- Parents borrowing through the PLUS program will face stricter limits and fewer repayment options.
- Borrowers on the Biden-era SAVE plan must choose a new plan by June 2028, or the government will auto-enroll them in the income-based plan.
Higher education at risk?
Critics warn the changes may:
- Push students to rely on private loans with less favorable terms
- Discourage graduate education, especially in fields like medicine, law, and social work
- Create shortages in high-demand rural professions
- Place a heavier burden on lower-income families
Meanwhile, Republican lawmakers argue the bill will reduce incentives for colleges to raise tuition by limiting federal borrowing.
What’s next?
President Trump is expected to sign the bill on July 4 at 5 p.m. EST. With that, sweeping changes to student borrowing and repayment will become law, affecting generations of future students.
More from FingerLakes1.com:
- Student Loans
- Latest on One Big Beautiful Bill
- Related: How the GOP’s bill will change SNAP and Medicaid
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