Student Loans: Big Changes Ahead

The Education Department has taken a significant step forward in reforming student loans. They concluded a crucial meeting last week to implement new rules from the One Big, Beautiful Bill Act, signed by President Trump last year. These changes will impact how students and families finance and repay their college education.

Key Changes

Grad PLUS Program Elimination

• The Grad PLUS program, which allowed graduate students to borrow unlimited amounts, is being phased out.
• Starting 2026:
• Graduate students can borrow up to $20,500 per year.
• Professional students can borrow up to $50,000 per year.
• The goal is to prevent schools from offering expensive, low-value programs.

Parent PLUS Loan Restrictions

• Parent PLUS loans, which allow parents to borrow for their child’s education, will also face new limits.
• Critics argue this will make college less accessible for low-income families, potentially pushing students toward private loans or away from higher education.

Repayment Plan Overhaul

• Multiple income-driven repayment plans will be replaced by the Repayment Assistance Plan (RAP).
• RAP may be more costly for some borrowers and lacks certain protections, such as exemptions for very low earners.

Implementation Timeline

• Some changes, like RAP, begin in 2026.
• Other reforms will be phased in through 2027 and 2028.
• The Education Department is finalizing details and will seek public feedback before full implementation.