Archive · 8 Nov 2025
US Student Debt Program Reforms Include Grad PLUS Elimination, Parent PLUS Cap
The U.S. government is changing how student loans work starting in July 2026.
They are getting rid of a loan program called Grad PLUS because it led to too much borrowing.
They are also putting a limit on how much parents can borrow through Parent PLUS loans.
New graduate students will have limits on how much they can borrow each year and in total.
Professional students will also have their own borrowing limits.
The old, complicated ways of paying back loans are being replaced with a simpler plan called the Repayment Assistance Plan.
These changes aim to make sure students don't borrow too much money for degrees that don't lead to good jobs and to encourage colleges to lower their prices.
The U.S. Department of Education is implementing changes to federal student loan programs, aligning with President Trump's 'One Big Beautiful Bill Act' (OBBBA).
The Grad PLUS loan program will be eliminated, and Parent PLUS loans will be capped.
New annual loan limits for graduate students will be $20,500, with an aggregate limit of $100,000.
New annual loan limits for professional students will be $50,000, with an aggregate limit of $200,000.
A simplified Repayment Assistance Plan (RAP) will replace previous complex student loan repayment options.
- Who
- US Department of Education, aligned with President Donald Trump's 'One Big Beautiful Bill Act'
- What
- Announced significant changes to the federal student debt program, including eliminating Grad PLUS loans and capping Parent PLUS loans, alongside simplifying repayment systems.
- When
- Changes will come into effect from July 2026, with the OBBBA signed into law in July 2025.
- Where
- United States
- Why
- To place commonsense limits on future student loan borrowing, simplify the federal student loan repayment system, hold universities accountable for outcomes, and put downward pressure on tuition costs.
- Effective Date
- July 2026
- Legislation Name
- One Big Beautiful Bill Act (OBBBA)
- Affected Loans
- Grad PLUS, Parent PLUS
- New Borrower Annual Cap (Graduate)
- $20,500
- New Borrower Aggregate Limit (Graduate)
- $100,000
- New Borrower Annual Cap (Professional)
- $50,000
- New Borrower Aggregate Limit (Professional)
- $200,000
- New Repayment Plan
- Repayment Assistance Plan (RAP)