Leader Chuck Schumer (D-NY) departs following a vote in the U.S. Capitol on June 27, 2025 in Washington, DC. Republican lawmakers are aiming to complete passage of the “One, Big, Beautiful Bill” by this weekend, which by some estimates would add at least $2.8 trillion to the $36.2 trillion U.S. debt in the long term. (Photo by Al Drago/Getty Images)Less
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The Senate’s final version of the One Big Beautiful Bill was released last night, and it introduces a complete overhaul of student loan repayment – for both existing borrowers and new borrowers. This comes after last minute changes removed some key provisions GOP lawmakers wanted.
For new borrowers who take out student loans after July 1, 2026, they will only have two options: a new Standard Plan, or an income-driven repayment plan called the Repayment Assistance Plan (RAP). Furthermore, new borrowers will face lower student loan borrowing limits and changes to loan types.
For existing borrowers, there will not be immediate changes, but between July 2026 and July 2028, the income-contingent repayment plans (ICR, PAYE, and SAVE) will be eliminated, and borrowers will have to migrate to a modified version of Income-Based Repayment (IBR).
This changes will have a dramatic effect on both how families pay for college, as well as how they repay their existing student loan obligations.
Changes For New Student Loan Borrowers
For students who take out student loans after July 1, 2026, there are changes in both the student loan limits, and the repayment plan options available.
While undergraduate borrowing limits remain the same, there will be new limits on Parent PLUS loans of $20,000 per year, per student, and $65,000 overall.
Graduate students face the elimination of Grad PLUS Loans, which previously had no limit. Graduate students will have the current $20,500 annual limit, and a $100,000 lifetime, while professional students will have the $50,000 annual limit and $200,000 lifetime.
For current graduate students, there is a three academic year grace period to use the current Grad PLUS Loans if you’ve already borrowed one before June 30, 2026.
On the repayment side, new borrowers will only have access to two plans: a standard plan that provides level payments over a set period of time, and the new income-based Repayment Assistance Plan (RAP).
The standard plan will based the repayment timeline on how much the student loan is:
- 10 Years: $25,000 or less
- 15 Year: $25,001 to $50,000
- 20 Year: $50,000 to $100,000
- 25 Year: $100,001 or More
The RAP Plan bases your student loan payment on your adjusted gross income. Monthly payments start as low as $10, and rise to a maximum of 10% of your AGI if you make over $100,000 per year. Borrowers will receive a $50 monthly discount per each qualifying dependent.
There are several benefits, including the fact that unpaid interest does not accrue, and if your loan payment does not put at least $50 towards your principal each month, you’ll see your principal reduced by $50 automatically. And the balance will be forgiven after 360 qualifying payments (30 years).
Changes For Existing Borrowers
The new law would require the migration of existing income-driven repayment plan borrowers into a modified version of Income-Based Repayment. Between July 1, 2026 and June 30, 2028, the Secretary of Education is to eliminate Income-Contingent Repayment, Pay As You Earn (PAYE), and Saving on a Valuable Education (SAVE), along with any associated forbearance.
The SAVE plan will likely end well before