Key Things to Know About Federal Student Loans in 2026
"The federal student loan program has some big changes on the way, impacting current borrowers and those in repayment. Most of the changes take effect on July 1, 2026, as per new provisions in the One Big Beautiful Bill Act," U.S. News & World Report writes.
... "While there have been tweaks to the federal student aid program in years past, Sarah Austin, policy analyst at the National Association of Student Financial Aid Administrators, says this year isn't typical. 'We really have with OBBBA many provisions in there that are reshaping student financial aid in general, but also significant changes in federal loan programs,' she says."
"'On the front end, in terms of current students or up-and-coming students not in repayment yet, the biggest impact will be the elimination of the Grad PLUS loan program,' she says. 'On the repayment side of things, the biggest changes or impacts are going to be the overhaul of the system to just two repayment plan options.'"
... "Grad PLUS loans were only capped by the school's cost of attendance, so the new grad student loan caps might seem like a big change. Austin cautions that the reduction in federal borrowing power is not as big of a change as you might think. That's because undergraduate borrowing is not included in the new graduate loan limits. So while the current system has an aggregate loan limit of $138,500 for both undergraduate and graduate federal loans, moving forward, the graduate loan limit will stand alone. 'The new graduate aggregate limit of $100,000 does not include any undergrad loans,' confirms Austin."
... "Institutions can set loan limits at the program level. 'This gives the school flexibility if it has a low-cost program or if it's seeing high default rates,' says Austin, noting that it's unclear right not how much schools will utilize this option."
... "Limits parent options. Parent PLUS borrowers will only have a standard repayment plan option. 'And there will be no time-based loan forgiveness component,' says Austin."
... "Austin recommends that current college students lean on their school's financial aid office. 'Financial aid administrators are working on proactive outreach and resources to provide for students,' she says."
"Once you're in the repayment phase, Austin advises to make sure your contact information is kept up-to-date with your loan servicers since they will notify you about any changes. Unfortunately, many students who graduate and move neglect to update their address. 'This period of time when leaving school is so essential because it's when payments will begin,' says Austin."
Publication Date: 2/12/2026