EDUCATION
Student Loan Changes: What You Need to Know
USAFri Jul 04 2025
The recent legislation signed by President Donald Trump, dubbed the "Big Beautiful Bill", brings significant changes to student loan repayment. This bill, passed by Congress, introduces new rules that could make it tougher for borrowers to manage their loans.
Key Changes
1. Elimination of Income-Driven Repayment Plans
- Replaced by two new options:
- Repayment Assistance Plan:
- Payments set between 1% and 10% of income.
- Minimum payment of $10.
- Remaining balance forgiven after 30 years.
- New Standard Repayment Plan:
- Fixed payments for 10 to 25 years, depending on loan amount.
- Fewer options available, making it harder to find a suitable plan.
2. Removal of Deferment Options
- No more deferments during economic hardship or unemployment.
- Only standard forbearance remains, which can be problematic for those facing financial difficulties.
3. Graduate Student Loan Changes
- Graduate PLUS program eliminated.
- Parent PLUS program remains, but with a lifetime cap of $65,000.
4. College Accountability Measures
- Federal student loan eligibility cut off for programs where graduates earn less than the median high school graduate in their state.
- Pell Grants extended to shorter-term programs, supported by Education Secretary Linda McMahon.
Criticism and Concerns
- Critics argue the bill will make it harder for borrowers to manage loans.
- Sen. Elizabeth Warren and Natalia Abrams (Student Debt Crisis Center) warn of higher payments and fewer repayment options for millions of borrowers.
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questions
What evidence supports the claim that reducing federal student loan borrowing will curb rising tuition costs?
If the Repayment Assistance Plan sets a minimum payment of $10, will borrowers be able to pay their loans with spare change?
Could the elimination of the graduate PLUS program be a plot to discourage people from pursuing higher education?
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