Student Loans: Big Changes Ahead

The Education Department has taken a big step forward in changing student loans. They finished a key meeting last week to figure out how to put new rules into action. These rules come from a law called the One Big, Beautiful Bill Act, which President Trump signed last year. The changes will affect how students and families pay for college and how they pay back their loans. One major change is getting rid of the Grad PLUS program. This program lets graduate students borrow a lot of money for school. The new rules will limit how much they can borrow. Starting in 2026, graduate students can only borrow up to $20, 500 per year, and professional students can borrow up to $50, 000 per year. The goal is to stop schools from offering expensive programs that don't help students in the long run.Another change is limiting Parent PLUS loans. These loans let parents borrow money to help pay for their child's education. The new rules will put caps on these loans too. Critics say these changes will make it harder for low-income families to afford college. They worry that students will have to turn to private loans or give up on higher education altogether. The way students pay back their loans is also changing. The new rules will get rid of several income-driven repayment plans and replace them with a new one called the Repayment Assistance Plan (RAP). RAP might be more expensive for some borrowers. It also doesn't have some of the protections that current plans offer, like exemptions for borrowers who earn very little money. The changes will happen over the next few years. Some changes, like the new RAP plan, will start in 2026. Other changes will be phased in through 2027 and 2028. The Education Department is still working out the details and will ask for public comments before everything is finalized.