Major changes to federal student loans are taking effect, impacting borrowers nationwide. The changes, part of President Donald Trump’s One Big Beautiful Bill Act, aim to simplify repayment options and improve the federal student lending system.
Repayment Plans
The law introduces 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.
Borrowers with dependents will receive a $50 reduction in their monthly payments for each dependent. Any remaining balances will be canceled after 30 years of payments. However, some borrowers may pay more under RAP than under current income-driven repayment options due to the plan’s structure.
Loan Limits
New limits on student loans are also being implemented. Graduate school students will no longer be able to borrow up to the full cost of attendance. Instead, they will be limited to $20,500 annually and $100,000 over their lifetime. Professional students, such as those in medical or law school, will be capped at $50,000 annually and $200,000 over their lifetime.
Parents who take out Parent PLUS loans to help their undergraduate students will face new limits as well. They will be able to borrow up to $20,000 annually and $65,000 total over the course of their child’s studies.
Original reporting: KTVZ (Central Oregon) — read the source article.
