Major Federal Student Loan Reforms Take Effect, Introducing New Repayment Plans and Loan Limits

Key provisions of the Working Families Tax Cuts Act, also known as the One Big Beautiful Bill Act, are now effective, significantly overhauling federal student aid. Changes include the introduction of two new repayment plans—the Tiered Standard repayment plan and the income-driven Repayment Assistance Plan (RAP)—and the expansion of Pell Grant eligibility to high-quality, short-term workforce programs. Additionally, new annual and aggregate borrowing limits are in effect for graduate and professional student loans, and Parent PLUS loans, while the Graduate Direct PLUS Loan program is eliminated for new borrowers. Loan eligibility for less-than-full-time students will also be proportionally reduced.