Major Federal Student Loan Program Changes, Including New Borrowing Limits and Repayment Plans, Effective July 1

Significant changes to federal student loan programs, enacted through the One Big Beautiful Bill Act (OBBBA), are set to take effect on July 1, 2026. These include the elimination of the Graduate PLUS Loan for new graduate and professional student borrowers, new annual and lifetime borrowing caps for graduate and Parent PLUS loans, and the introduction of two new repayment plans: the income-driven Repayment Assistance Plan (RAP) and the Tiered Standard Plan. Additionally, federal student loan borrowers enrolled in auto-pay will receive a 1% interest rate reduction starting July 1.