New student loan rules take effect July 1. Here's what to know.
Summary
Starting July 1, new federal student loan rules will limit how much students and parents can borrow and change repayment plans. These changes affect millions of borrowers and aim to simplify the loan system and reduce overall student debt.Key Facts
- The changes come from the 2025 "One Big Beautiful Bill Act."
- Parents can now borrow up to $20,000 per year and $65,000 total for their child's undergraduate education, down from unlimited borrowing.
- Graduate students can borrow up to $20,500 per year with a new lifetime cap of $100,000 for their degree.
- Students in professional fields like law and medicine face a $50,000 per year and $200,000 total borrowing limit.
- About 7.2 million people on the Biden-era SAVE repayment plan will be shifted to new repayment options as that program ends.
- New borrowers can no longer take out Graduate PLUS loans, which had no limits before July 1.
- There is a total lifetime borrowing cap of $257,500 for loans taken out after July 1.
- Borrowers are encouraged to keep their contact info current and use tools like online calculators to choose repayment plans.
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