New federal student loan rules cap borrowing and reshape repayment on July 1

Starting July 1, 2026, the One Big Beautiful Bill Act imposes stricter federal student loan borrowing caps (Parent PLUS: $20,000/year and $65,000 per student; graduate degrees up to $100,000 total; professional degrees up to $200,000 total with a $50,000/year cap) and a lifetime cap of $257,500 per borrower; new borrowers will have only two repayment options (Tiered Standard and the Repayment Assistance Plan, RAP), while current borrowers can stay on existing plans if they don’t take new loans (PAYE/ICR are phased out by 2028). The SAVE program ends in 2028, with a 90‑day window for borrowers to choose a new plan; Pell Grants tighten eligibility and expand to shorter-term, high‑skill programs. Borrowers should contact their loan servicers, update their contact information, and use calculators to compare options.