It’s official: millions of student-loan borrowers will face sweeping repayment changes this summer.
On Thursday, President Donald Trump’s Department of Education announced its final rule for its student-loan repayment overhaul, which includes new borrowing caps and repayment plans that will go into effect on July 1.
Nicholas Kent, the department’s undersecretary, told reporters on a press call that the final rule includes four key provisions: the elimination of the Grad PLUS program, new loan limits for graduate and professional students, allowing schools to establish their own loan caps “that match the true value” of the programs they offer, and the creation of two new repayment plans.
“Collectively, our changes will ensure students continue to have the access that they need for federal student loans, while helping prevent borrowers from taking on unmanageable debt levels that they may never be able to repay,” Kent said.
The changes stem from Trump’s “big beautiful” spending legislation, and were negotiated with stakeholders, including industry representatives and borrower advocates, at the end of 2025.
The new borrowing caps are among the most discussed changes in the overhaul. The Department of Education is setting a $100,000 lifetime cap for graduate students and a $200,000 cap for professional students, and it narrowed the definition of “professional” to 11 programs, including law, medicine, and dentistry. That means previously eligible programs, like postgraduate nursing, are no longer eligible.
Some students and advocates have raised concerns that the caps could push students to seek additional financing in the private lending market or forgo their programs altogether.
Additionally, the department is capping Parent PLUS loans for the first time, which allows parents to borrow the full cost of attendance for their kids’ programs. The new cap for parent borrowers will stand at $20,000 annually.
The department will also be rolling out a new Repayment Assistance Plan, replacing existing income-driven repayment plans, including the SAVE plan, which the administration is eliminating. RAP would waive unpaid interest and set monthly payments at a minimum of $10, which is less generous than the terms of existing plans. This will increase borrowers’ monthly payments, according to Federal Student Aid projections, sometimes by hundreds of dollars.
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