Major Federal Student Aid Changes, Including New Loan Repayment Plans and Limits, Set to Take Effect July 1, 2026

Significant changes to federal student aid, enacted under the Working Families Tax Cuts Act (WFTCA) or "One Big Beautiful Bill Act," will take effect on July 1, 2026. These reforms will introduce a narrower set of repayment options for new borrowers, limiting choices to a revised standard plan and a new Repayment Assistance Plan (RAP). Additionally, Grad PLUS loans will be eliminated for new borrowers, and new annual and lifetime caps will be imposed on Direct PLUS loans for graduate/professional students and Parent PLUS borrowers. Pell Grant eligibility will also become more limited for students receiving other scholarships covering their full cost of attendance.