Newsletter 2026 V2 Article - Big Changes for Student Loans

If you follow student loan news, you may have heard about the “One Big Beautiful Bill” (OBBB) Act. Part of the OBBB was designed to simplify student lending and repayment, representing the most significant change to federal student loans in decades. 

What’s Changing for Parent PLUS Loans This Summer 
Beginning July 1, parents who take out a new Parent PLUS loan will be limited to borrowing $20,000 per year, with a lifetime maximum of $65,000 per student. 

Upcoming Changes for Graduate Students 
Grad PLUS loans will be eliminated for new borrowers starting July 1. Instead, graduate students will rely on Direct Unsubsidized Loans with new caps:

• Most graduate students: up to $20,500 per year, with a $100,000 lifetime limit
• Students in professional programs (like law or medicine): up to $50,000 per year, with a $200,000 lifetime limit
• A new federal loan lifetime cap of $257,500 will apply (not including Parent or Graduate PLUS) 

Simplifying Repayment with Streamlined Plans 
Starting in July 2026, new borrowers will choose between just two plans as the OBBB Act aims to streamline clearer and more transparent repayment options:

• A Standard Repayment Plan with fixed payments over 10–25 years, depending on loan size
• A new Repayment Assistance Plan (RAP) that caps payments at 1–10% of adjusted gross income over 30 years, with potential forgiveness at the end 

Other changes on the horizon include: 
Beginning July 2027, economic hardship and unemployment deferments will be eliminated for new loans, and forbearance options will be more limited—making it even more important to plan ahead for repayment. 

By July 2028, current income-driven plans like SAVE, PAYE, and ICR will be phased out. Borrowers on those plans will be moved to IBR or RAP if they don’t choose a new option. 

What You Can Do Now—And How We Can Help:

• If you’re paying for college for the first time, it’s a good idea to stay informed about the changes taking effect in 2026.
• If you already have student loans, taking a moment to review your options can help you better plan ahead.
• If there’s still a funding gap after scholarships, grants, and federal loans, it may be worth exploring private student loan options carefully. 

Pursuing your education is an important step, and you don’t have to navigate it alone. 

We’re here as a resource to help you understand your options, borrow thoughtfully and feel confident about your next steps. 

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