Is this the end of affordable loans? What Trump’s ‘One Big Beautiful Bill’ means for students
A sweeping domestic policy package, referred to by President Trump as his “One Big Beautiful Bill,” is moving quickly through the House of Representatives, with House Speaker Mike Johnson indicating a floor vote could come soon after the Rules Committee concludes its review this week.The legislation—still subject to changes in the Senate—extends Trump’s 2017 tax cuts and commits billions to conservative policy goals, including renewed funding for a U.S.-Mexico border wall. But perhaps its most consequential provisions for everyday Americans are those targeting federal student loan programs, which would see their most significant restructuring in decades.
Fewer repayment choices, higher monthly costs
At the heart of the bill is a plan to eliminate nearly all current student loan repayment options, replacing them with just two: A fixed monthly payment plan and a new income-based Repayment Assistance Plan (RAP).The fixed plan would spread out payments over time depending on the size of the loan. Smaller loans—up to $25,000—would be paid off in 10 years. Larger loans of up to $100,000 would require 20 years of repayment, while balances above that could stretch to 25 years.RAP, meanwhile, offers monthly payments tied to annual income. Borrowers making under $10,000 would pay as little as $10 per month, while those earning over $100,000 would pay 10% of their gross annual income. However, forgiveness under this plan would only come after 30 years of payments—longer than the current 20-25 year timelines. The plan also introduces a $10 minimum monthly payment and allows for $0 payments only for very low-income borrowers.
Tighter limits on how much students and parents can borrow
The bill introduces strict new borrowing caps. Undergraduate students would be limited to $50,000 in total federal loans, while graduate and professional students could borrow between $100,000 and $150,000 depending on their program. Parents would be restricted to just $50,000 in total loans—no matter how many children they’re supporting. In total, no family would be allowed to borrow more than $200,000 across all federal programs.Additionally, the bill phases out eligibility for Federal Direct PLUS Loans for graduate students and parents beginning in July 2026, further shrinking federal options and potentially pushing many toward private lenders.
Pell Grant access and loan amounts to shrink for many
One of the most controversial changes lies in how the federal government would calculate loan amounts. Rather than basing aid on the actual cost of a student’s school, the bill pegs loan eligibility to the median cost of similar college programs. That means students attending more expensive institutions could receive significantly less federal support—even if their program costs more.Advocacy groups like the Student Borrower Protection Center have condemned this provision, warning it could disqualify many students from Pell Grants, push borrowers toward high-interest private loans, and make college less accessible for low- and middle-income families.
Changes to deferment, forbearance, and rehabilitation
The legislation also makes it harder for borrowers to pause payments. Starting in July 2025, students will no longer be able to defer loan payments due to unemployment or financial hardship—a safeguard widely used during economic downturns. Forbearance, or temporary suspension of payments, would be capped at 9 months within any 24-month period.However, there’s a modest silver lining: borrowers in default would be allowed two chances to rehabilitate their loans, rather than just one as under current rules.
Who will be affected—and when?
The bill’s repayment changes would apply to all borrowers still repaying their loans. However, those already paying off loans would be able to continue deferring payments due to hardship—and any such months would still count toward the 30 years required for forgiveness under the new income-based plan.The bill directs the Secretary of Education to begin transitioning to the new system within nine months of the legislation becoming law, with full implementation expected by July 1, 2026.
Student advocates warn of widespread harm
Borrower advocates are sounding the alarm. The Student Borrower Protection Center (SBPC) and other groups argue the bill would increase monthly payments, strip away protections for struggling borrowers, and restrict access to affordable education for future generations.As the bill advances through Congress, its student loan provisions are likely to be one of the most fiercely contested elements—particularly with millions of borrowers, parents, and future students watching closely.
