An overhaul of the federal student loan system that took effect on July 1 placed stricter limits on borrowing and reduced repayment options for new and existing loan-holders.
The U.S. Department of Education said these reforms — part of the One Big Beautiful Bill Act — are aimed at limiting and simplifying the system. The Federal Student Aid office said nearly 43 million borrowers had $1.7 trillion in loans as of March.
But critics argue the changes will make it more difficult and costly for students and families to finance higher learning. Experts say this appears to be the first time the government has changed the terms of income-driven repayment plans to the detriment of existing borrowers. “Congress really pulled the rug out from under them by abruptly increasing their financial obligations after the fact,” said Abby Shafroth, director of the National Consumer Law Center’s Student Loan Borrower Assistance Project.
Newly enrolled graduate students no longer can borrow up to the “cost of attendance,” instead facing profession-based loan limits. For current students, these limits take effect in July 2029.
Parents with existing Parent PLUS loans still have several years to continue borrowing up to the cost of attendance. But new borrowers in the popular program have stricter borrowing limits.
CNN, Aug. 4
New York Times, Aug. 19