Major student-loan changes are coming, including new caps on borrowing. Some people might not face them right away.
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On July 1, the repayment changes in President Donald Trump’s “big beautiful” spending legislation will take effect. The changes include a new income-driven repayment plan, ending a program that allows graduate students to borrow the full cost of attendance, and introducing new borrowing caps for advanced degrees.
While some provisions will be phased in by 2028, others, like the new borrowing caps, will be implemented this summer. However, some borrowers may qualify for an exception.
According to Federal Student Aid, borrowers who meet the following requirements will be able to retain the loan limits that existed prior to July 1:
You were enrolled in a program of study as of June 30, 2026You received at least one direct federal loan, or your parent received a parent PLUS loan, for that program of study prior to July 1, 2026And you are enrolled at the same institution and pursuing the same credential after July 1, 2026, meaning that if you are in a bachelor’s degree program, you cannot switch to an associate degree program to maintain the loan limit exception.
Borrowers who qualify for the exception will retain it for either three academic years or the difference between the expected length of the program and the amount the borrower has already completed, whichever is shorter.
The Trump administration has said the repayment overhaul is intended to simplify a complicated repayment system and curb excessive borrowing, for example with the new caps.
Advocates and Democratic lawmakers have warned that the looming repayment changes could financially strain borrowers. In addition to the new loan limits, the Trump administration also eliminated the SAVE repayment plan, created by former President Joe Biden to give borrowers cheaper monthly payments and a shorter timeline to loan forgiveness.
In July, the 7 million borrowers enrolled in SAVE will begin learning details of their 90-day timeframe to switch to a new repayment plan and face higher monthly payments, some to the tune of hundreds of dollars more.
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