With Donald Trump’s arrival at the White House, citizens were aware of the changes that would take place in the administration of various key sectors. Some of the most significant changes are those brought about by the Big, Beautiful Bill. Starting in July 2026, the federal student loan system will undergo one of its most significant restructurings in decades. These changes will affect both current borrowers and those who plan to apply for loans in the future. One of the most immediate effects for those affected is the elimination of most existing repayment plans, meaning that nearly half a million borrowers could see their monthly payments increase significantly.
Degrees as law or medicine: the annual limit will be $50,000, with a lifetime maximum of $200,000
Although some of the changes are drastic, they will certainly be progressive and gradual. The goal is to restructure, but also to do so with advance notice so that those interested can adapt as best as possible. For example, under the new rules, graduate students will have an annual loan limit of $20,500, with a lifetime limit of $100,000.
Congress has approved sweeping changes to borrowing limits, repayment structures, and loan access. For students pursuing professional degrees such as law or medicine, the annual limit will be $50,000, with a lifetime maximum of $200,000. Specifically, starting July 1, 2026, the Department of Education will offer only two repayment options for new borrowers: a standard plan with fixed monthly payments and a new plan that adjusts payments based on income (called IBR).
Some required payments have been halted for now, but interest on those loans will begin accruing again starting August 1, 2025
It’s true that, in any case, the Department of Education has been slow to implement the changes, in part due to staff cuts at the Federal Student Aid office under the Trump administration. The cuts were made, according to the administration, to make the transition to the digital age. In order to facilitate procedures and digitize certain processes, significant staff cuts were made.
On the other hand, it’s important to keep in mind the limits on the amount that can be borrowed. The total borrowing limit for all federal loan programs, excluding Parent PLUS, will be $257,500. Borrowers currently enrolled in the Saving on a Valuable Education (SAVE) plan should constantly check the website for updates, as their status is unclear. Following certain lawsuits, some required payments have been halted for now, but interest on those loans will begin accruing again starting August 1, 2025. Additionally, graduate students will now be limited to $100,000 in federal loans, up from the previous limit of about $138,000.
The waiver clause offers a limited timeframe and flexibility that may aid the transition
The restructuring eliminates the Graduate PLUS Loan for new borrowers. For years, the program provided a financial safety net for students pursuing higher education, allowing them to access loans above the Stafford Loan limits. Furthermore, adding to what we mentioned before, parents who rely on Parent PLUS loans will also face restrictions, with a limit of $20,000 per year and a total of $65,000 per child. Those pursuing professional studies, such as law or medicine, will have a limit of $200,000.
Some believe that restricting federal loans could incentivize institutions to reduce tuition. In fact, for students who already had federal loans before the 2026 deadline, the news is less dramatic. The current conditions will remain in place for up to three academic years or until degree completion, whichever comes first. In any case, it is still unclear whether the financial pressure will actually push schools to make education more affordable or if it will shift some of the burden to students in some other way. In any case, the waiver clause offers a limited timeframe and flexibility that may aid the transition.
