Major Federal Student Loan Reforms Take Effect in 2026, Introducing New Borrowing Limits and Repayment Plans

Significant changes to federal student loan programs, enacted by the 'One Big Beautiful Bill Act' in July 2025, are set to reshape higher education financing. Key provisions taking effect in 2026 include new annual and aggregate borrowing caps for graduate and professional students, the elimination of the Grad PLUS program for new borrowers, and stricter limits on Parent PLUS loans. The Repayment Assistance Plan (RAP) will become the default income-driven repayment option for new borrowers, replacing the SAVE plan. These structural changes require current and prospective borrowers to re-evaluate their financial planning for higher education.