Planning for college has always required thoughtful financial preparation. Now, upcoming federal policy changes may reshape how students and families approach borrowing for higher education. The One Big Beautiful Bill Act, signed into law in 2025, introduces major updates to federal student loan programs. Most of these changes are scheduled to take effect July 1, 2026, and will generally apply to new federal student loan borrowers. While federal student loans will continue to be available, the overall direction of the law focuses on setting clearer borrowing limits and simplifying loan program options. Below is a high-level look at three key changes students and families should understand as they plan for the future.

Elimination of the Grad PLUS Loan Program
One of the biggest changes coming to student lending is the elimination of the federal Graduate PLUS loan program for most new borrowers beginning later this year. Historically, Grad PLUS loans allowed graduate and professional students to borrow up to the full cost of attendance after other financial aid was applied. With this program going away for new borrowers, graduate students will need to primarily rely on other sources of funding, which have defined borrowing limits.

New Borrowing Caps for Graduate Students
The law also introduces new federal borrowing limits for graduate and professional students. In the past, some students were able to borrow enough federal funding to cover most or all of their education costs. Moving forward, federal loans and graduate education will have defined annual and lifetime borrowing limits. Some professional degree programs, like certain medical or law programs, may have higher borrowing limits than other graduate programs, but borrowing will still be capped. 

New Borrowing Caps for Parent PLUS Loans
Parents who use federal Parent PLUS loans will also see new borrowing limits beginning in July 2026. In the past, Parent PLUS loans could often cover most or all remaining education costs after other financial aid was applied. Under the new law, Parent PLUS loans will have defined annual and lifetime borrowing limits per student.

What This Means for Students and Families
These changes reflect a shift toward defined borrowing limits and fewer federal loan program options. For many families, this may mean starting financial planning earlier and placing a greater focus on understanding the total cost of attendance before selecting a school or program. Students and families may also find themselves relying more on scholarships, grants, and savings to help cover education costs. In some cases, it may become more common to use a combination of funding strategies rather than relying on a single source of financing. Federal student loans remain an important resource but understanding how they fit into a larger financial plan will become even more important moving forward.

Stay Informed About Federal Student Aid Changes
Federal student aid policies continue to evolve, and additional guidance may be released as implementation approaches. For the most complete and up-to-date information, please visit the U.S. Department of Education’s website, StudentAid.gov.