Major changes to federal student loans are taking effect today, as part of President Donald Trump’s One Big Beautiful Bill Act. The new rules will impact borrowers, including those in Texas, with stricter loan limits and new repayment options.
Repayment Plans
The US Department of Education has introduced a new tiered standard repayment plan and a Repayment Assistance Plan (RAP). Under the standard plan, borrowers will have between 10 years and 25 years to repay their loans, depending on the amount borrowed. The RAP plan will base monthly payments on the borrower’s income, ranging from 1% to 10% of their earnings, with a minimum payment of $10 per month.
Some borrowers may pay more under the RAP plan than under current income-driven repayment options. However, these new plans only apply to students taking out new loans for the next two years. Existing borrowers won’t see immediate changes, but most current repayment plans will be eliminated by July 2028.
Loan Limits
Graduate school students will face stricter loan limits, with a $20,500 annual cap and a $100,000 lifetime limit. Professional students, such as those in medical or law school, will have a $50,000 annual limit and a $200,000 lifetime limit. Parents who take out Parent PLUS loans to help their undergraduate students will be limited to $20,000 annually and $65,000 total.
The Department of Education has also introduced a new incentive for borrowers who sign up for automatic payments, offering a one percentage-point reduction in interest rates until June 2028.
Original reporting: KEYT (Ventura/Santa Barbara) — read the source article.
