has passed President Trump’s “Big Beautiful Bill,” triggering the most extensive changes to federal student loans in a generation. The legislation, which cleared both the House and Senate on narrow party-line votes, is now headed to the president’s desk for signature.This overhaul will dramatically reshape how Americans borrow for college, repay student debt, and access forgiveness programs.

The bill eliminates most existing income-driven repayment options. By mid-2026, borrowers will have to choose between a new, less flexible income-based plan or a standard plan with fixed payments. The new Repayment Assistance Plan (RAP) stretches repayment up to 30 years before any remaining balance is forgiven, likely increasing total interest for many.


Graduate and Parent PLUS loans, once a way to cover nearly unlimited college costs, are now sharply restricted. Graduate students will face a $100,000 lifetime borrowing cap ($200,000 for professional degrees), and Parent PLUS loans are capped at $65,000 per student. The Grad PLUS program is eliminated entirely.
Schools will only remain eligible for federal loan programs if their graduates earn more than typical high school or bachelor’s degree holders in their state. This move is designed to pressure colleges to deliver real economic value, but could cut off funding for underperforming programs.
The bill keeps PSLF in place, but future regulatory tweaks could make qualifying harder. Borrowers in medical or dental residencies, for example, may soon find their time in training no longer counts toward forgiveness.

The legislation also introduces stricter eligibility for Medicaid and nutrition assistance, aiming to reduce federal spending. Critics warn this could leave many low-income Americans without critical support.
Republican leaders argue the bill is necessary to rein in government spending and address the ballooning costs of student loan programs. They point to inflation and the expense of previous loan pauses as justification for the changes.

Democrats and borrower advocates counter that the new rules will make college less affordable, reduce options for struggling borrowers, and push more families into debt. They warn that the bill’s cuts to social programs will hit the most vulnerable hardest.