Major Federal Student Loan Changes Take Effect for New Borrowers in 2026

Significant changes to federal student loans, enacted by the One Big Beautiful Bill Act (OBBBA) in July 2025, are now in effect for new loans disbursed starting July 1, 2026. These reforms include the elimination of Grad PLUS loans for new graduate and professional student borrowers, new annual and aggregate borrowing limits for graduate, professional, and Parent PLUS loans, and a narrower set of repayment options, phasing out most income-driven repayment plans like SAVE, PAYE, and ICR for new borrowers.