Major Overhaul or Major Harm? What’s Happening to Student Loans & How to Take Action
- SDCC
- 1 hour ago
- 4 min read
by Ángel Rentería, SDCC Communications Associate
On July 4, 2025, President Trump signed the One Big Beautiful Bill Act (OBBBA) into law, laying the groundwork for a major overhaul of the student loan system. However, these changes are not yet fully implemented, as they must go through a negotiated rulemaking (Neg Reg) process.
Neg Reg is a process for changing federal regulations that involves key stakeholders and community engagement. The process consists of proposed regulations and public comment periods. In September of 2025, the Department of Education (ED) created the Reimagining and Improving Student Education (RISE) Committee, tasked with implementing all the changes outlined in the OBBBA.
The final rule was published on January 30 and these changes to the student loan landscape will be detrimental to Americans across the country and have long-lasting impacts. This is what the new student loan landscape will look like, and how you can weigh in and take action. Already know the proposed rules and want to write a comment? Click here to learn how to submit your public comment.
Federal Student Loan Lending Limits Starting July 1, 2026
Graduate Students: $20,500 per year and a $100,000 lifetime limit.
Professional Students: $50,000 per year with a $200,000 total lifetime limit.
Parent Plus Loans: $20,000 each year per dependent, with a maximum of $65,000 per year per dependent.
All Borrowers: With the exception of Parent Plus Loan holders, all borrowers are subject to the maximum lifetime borrowing limit of $257,500 across all federal student loan types. Regardless if you pay back the entire loan balance, borrowers cannot take out additional loans once they reach that limit.
Current students are exempt from these loan limits for 3 years if they are enrolled in a qualifying program with full-time status on or before July 1, 2026.
Want to write your comment in opposition to these loan limits? Click here to jump to how to submit a public comment.
Alongside these loan limits, the major overhaul of changes include:
Existing repayment plans, Pay As You Earn (PAYE) & Income Contingent Repayment (ICR), will be eliminated by July 1, 2028.
Only two repayment options will be available for anyone who borrows or consolidates a loan on or after July 1, 2026: RAP and the New Standard Plan.
Repayment Assistance Plan (RAP): new Income Driven Repayment (IDR) plan with a $10 minimum payment and 30 year repayment term to achieve loan forgiveness.
Creation of a New Standard Plan with repayment periods between 10 and 25 years.
Elimination of Grad Plus Loans. Unsubsidized graduate loans will be offered instead.
Borrowers will be able to go through the Loan rehabilitation process twice starting July 1, 2027.
End of Unemployment Deferment and Economic Hardship Forbearance for new loans taken on or after July 1, 2027.
Maximum forbearance of 9 months in a 24-month period for new loans taken on or after July 1, 2027.
These changes limit access to higher education and will push prospective students to explore the private loan market, which offers no loan forgiveness, repayment plans, or borrower protections. These dangerous proposed changes are not yet finalized, and that’s where we all come in. It’s time for as many individuals as possible to voice their opposition to these potential changes.
Take Action To Oppose These Changes
Right now, you can submit a public comment using the link below:
Public Comment Link: https://www.federalregister.gov/d/2026-01912
Here are some tips to write an effective public comment:
State your opposition to the proposed rule changes that would result in a complete overhaul of the federal student loan system.
Most importantly: add your story. If you or someone you know will be impacted by these changes, share how. If you won’t be impacted, share why this is bad for your community or the country as a whole.
Feel free to use the following messaging to help guide your public comment:
I am a concerned American in opposition to the proposed rule from the RISE Neg Reg committee. These changes are a disservice to Americans and will put them on a path of financial harm.
Limiting lending amounts, eliminating affordable repayment plans, reclassifying professional degrees, and the changes in this rule will push Americans into the private loan system, resulting in predatory lending practices, higher interest rates, and virtually no borrower protections. All this comes as the government does not provide funding for higher education.
These changes will harm the American economy as borrowers will have unaffordable monthly payments and even tighter budgets. Additionally, these changes will result in a professional shortage across fields that require specialized degrees, such as nursing, teaching, legal support, and more. In order to preserve the stability of the American economy, these changes cannot be implemented.
[Add Personal Remarks Here]
I hope that you stand in opposition to these changes and preserve the well-being of 42 million Americans with student loan debt and future borrowers.
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About the Student Debt Crisis Center
Student Debt Crisis Center is a national advocacy organization with nearly 2,000,000 supporters calling for fundamental reforms to student loan policies and an end to the student debt crisis. Learn more here.