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Major changes to the federal student loan landscape will soon take effect, reshaping the way many Americans will borrow and pay for higher education, potentially for years to come. These sweeping changes—part of last year’s —might feel overwhelming to borrowers, especially amid pervasive news coverage and misinformation about student loans.Ìý

As a higher education policy analyst who has been tracking this closely, I believe it’s important to understand not only the details of the new policies but also their practical impact on borrowers. Here are three takeaways on what’s at stake for families and what’s ahead for student loans.Ìý

New loan limits will affect how students—beyond those at the graduate level—pay for college.Ìý

of the has focused on graduate students, with good reason. Previously, these students could borrow up to a program’s full cost of attendance through the federal government. Starting in July, however, new graduate students will generally be limited to $20,500 a year in federal student loans, up to an overall cap of $100,000. Students in select fields will be able to take out $50,000 per year and $200,000 total.Ìý

New loan limits won’t just affect grad students. Part-time students at both the graduate and levels, previously eligible to borrow as much as their full-time counterparts, will be subject to prorated loan limits based on their enrollment intensity.Ìý

Similarly, parents borrowing for their undergraduate dependents—also previously eligible to take out federal loans for the total cost of college—will now be limited to $20,000 per student per year, up to a maximum of $65,000 per student. In addition, will be able to set lower limits for student and parent borrowers for specific programs.Ìý 

Current graduate students and parents who have (or whose dependents have) previously taken out loans will have a phase-in period before the new limits take effect. New students and borrowers, as well as students enrolled in programs with institutionally determined limits or enrolled part-time, will feel the impact of these changes immediately.Ìý

New repayment options are coming online, but different borrowers are eligible for different plans.

OBBBA created two new repayment options: . They will be the only repayment plans offered to those who take out loans on or after July 1, 2026. (Those who consolidate their loans on or after July 1 will also generally be limited to these options.) 

While the law simplifies repayment for new borrowers, it’s more complicated for those with current federal loans. These borrowers will have access to RAP as well as the of fixed-repayment and income-driven plans. Some of the existing plans, however, are being phased out. Both the Income Contingent Repayment (ICR) Plan and the Pay as You Earn (PAYE) Plan will close to borrowers on July 1, 2028. Furthermore, those enrolled in the —a repayment option that was recently discontinued after a lengthy legal battle—will have at least 90 days after July 1, 2026, to switch to another plan.

will continue to have a more limited set of repayment choices that will no longer include an income-driven option for many. Those who take out a Parent PLUS loan on or after July 1, 2026, will be eligible only for the Tiered Standard Plan. Only those parent borrowers who consolidated a parent loan before July 1 will be able to access an income-driven repayment plan going forward.

Next summer, of the act will come online. Those borrowing on or after July 1, 2027, will have limited options for pausing payments. They will lose access to economic hardship and unemployment deferments and will be eligible for general forbearances for more limited periods. Borrowers will also have an to get their loans out of default starting in July 2027.Ìý

All of these changes mean both new and existing borrowers should assess which options .Ìý

Larger developments in the student loan environment could also have a significant impact on borrowers.Ìý

Earlier this year, the Department of Education announced that it would to the Department of the Treasury. This transition is starting with the collections system and accounts in default. But exactly how it will work remains unclear.Ìý

Last year, before this move was announced, the Trump administration of student debt, only to early this year. It’s not clear when collections will resume, but in the interim, borrowers sit in default, and many more are significantly behind on their payments. Those in default continue to accrue interest and lack access to many of the benefits and protections provided to borrowers in the repayment system.

Overall, the long-term trajectory of these changes—large and small—remains uncertain. The Department of Education is only beginning what promises to be a long process of implementing OBBBA. And as the administration works to dismantle the department, expertise and capacity have been lost—including at the , which manages the loan portfolio, among other responsibilities. At the same time, many of the policy changes, especially the loan limits, are facing significant pushback from and . In fact, last week, a court weighed in on the definition of a professional degree, creating for institutions and borrowers.

In the meantime, many students, parents, and borrowers will be trying to navigate these new policies, fill funding gaps, weather a likely bumpy implementation, and make decisions about their academic and economic futures.Ìý