US EditionGOP Budget Bill Reduces Student Loan Repayment Options and Limits Borrowing. What You Need to Know
UNITED STATES, JUL 2 – The federal overhaul caps borrowing for graduate students and parents, reduces repayment plans to two, and is projected to increase average annual payments by nearly $3,000, advocates say.
- The House passed President Donald Trump's student loan reform bill on July 3, 2025, limiting repayment options and borrowing caps nationwide.
- The bill follows prior federal changes including the COVID-19 moratorium, Biden’s halted loan forgiveness, and Republican-led repayment revisions.
- It simplifies repayment options to two choices starting July 1, 2026: the traditional standard plan and a newly introduced Repayment Assistance Plan that calculates payments based on income, while also imposing borrowing limits on parents and graduate students.
- Borrowers will lose deferral rights for unemployment or hardship, face forbearance limits of nine months per 24-month period, and gain two rehabilitation chances for defaulted loans.
- These changes could increase annual borrower payments by about $3,000, limit federal borrowing, and shift repayment burdens, while the bill’s House passage sends it to Trump for signature.
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