Students and families planning to borrow for college should be aware of major changes coming to the federal student loan system beginning July 1, 2026.

The changes stem from federal regulations finalized by the U.S. Department of Education on May 1, 2026, implementing provisions of the One Big Beautiful Bill Act that was signed into law in 2025. Federal officials say the goal is to simplify repayment, limit excessive borrowing, and reduce long-term student debt.

One of the biggest changes is the elimination of the Graduate PLUS Loan program for new borrowers. Graduate and professional students who begin borrowing after July 1 will no longer have access to Graduate PLUS loans, although some current borrowers may be grandfathered under transition provisions.

The new rules also place stricter limits on how much students and parents can borrow. Graduate students will generally be limited to $20,500 annually with a lifetime borrowing cap of $100,000, while certain professional degree programs such as medicine and law will have higher limits. Parent PLUS loans will also face new annual and lifetime borrowing caps.

Repayment options will be simplified as well. Many existing income-driven repayment plans will be phased out for new borrowers and replaced with a new Repayment Assistance Plan (RAP), along with a standard repayment option. Federal officials say the changes are intended to make repayment easier to understand while helping borrowers avoid taking on debt levels that may be difficult to repay.

The regulations also give colleges and universities greater authority to establish loan limits that better reflect the cost and value of specific academic programs. Supporters say the changes will help reduce excessive borrowing, while critics have expressed concerns that some students may need to rely more heavily on private loans or other sources of financial aid.

Current borrowers will generally retain access to many existing repayment options, but students entering college or graduate school after July 1, 2026, will be subject to the new rules. Families planning for college are encouraged to review the changes carefully as they make decisions about future borrowing.

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