Trump’s “Big, Beautiful Bill” Set to Reshape Federal Student Loans

Washington D.C., July 4, 2025 — A sweeping overhaul of the federal student loan system is imminent as President Donald Trump’s landmark “Big, Beautiful Bill” awaits only his signature to become law. The nearly 900-page legislation, recently passed by both the House and Senate, includes significant changes that could permanently alter how millions of Americans finance higher education.

The bill, while widely known for making the 2017 tax cuts permanent and rolling back Biden-era clean energy credits, also targets the student loan system with bold reforms. Key provisions include strict lifetime borrowing caps, a reduction in repayment options, and the elimination of several popular federal aid programs.

Major Changes Ahead:

• Borrowing Caps Introduced:
  New lifetime limits will restrict federal loan borrowing to $100,000 for graduate students and $200,000 for medical and law students. Parent PLUS loans will be capped at $65,000 and will no longer qualify for federal repayment assistance.

• Repayment Plans Reduced:
  The current array of income-driven repayment options will be replaced by just two plans:

  • A Standard Plan, requiring repayment over 10 to 25 years based on the loan amount.

  • A Repayment Assistance Plan, where borrowers pay 1%–10% of their discretionary income monthly.

• End of the SAVE Plan:
  The Biden-era SAVE (Saving on a Valuable Education) plan, which enrolled over 8 million borrowers, will be phased out. Borrowers will be required to select a new plan between July 2026 and June 2028. Those who don’t will be automatically enrolled in the new Repayment Assistance Plan.

Who Will Be Affected?
The changes will primarily impact new student loan borrowers. Current borrowers—over 40 million Americans—are expected to be grandfathered under existing rules.

If signed into law, the bill will mark one of the most dramatic shifts in student lending policy in decades, reshaping how future generations approach college financing and debt repayment.