"Higher education institutions may limit the federal student loans that college students can take out next year, if they deem the student's major more likely to default once they finish school," Investopedia reports.

... "Colleges typically restrict loans based on the student's cost of attendance and the amount of other financial aid they received. The 'One Big Beautiful Bill' largely broadens schools' ability to limit loans."

"'I don't think it's going to be massive. The school is not going to look at every program and bring it all down by $2,000,' Megan Walter, senior policy analyst with the National Association of Student Financial Aid Administrators, told Investopedia. 'I think it'll be really specific to programs that they're aware are already having issues with default, with students defaulting because their earnings are just not able to keep up with the amount of borrowing.'"

... "If the institution's CDR rate exceeds 40% for a year or exceeds 30% over three years, the school will lose the ability to distribute federal aid to its students, such as student loans and Pell Grants."

"The new ability to restrict loans across specific majors will make it easier for schools to ensure students are not borrowing more than they can handle based on past default rates in specific programs of study, Walter said."

NASFAA's "Notable Headlines" section highlights media coverage of financial aid to help members stay up to date with the latest news. Articles included under the notable headlines section are not written by NASFAA, but rather by external sources. Inclusion in Today's News does not imply endorsement of the material or guarantee the accuracy of information presented.

Publication Date: 9/2/2025