New federal student loan rules are changing how students and families pay for college, introducing regulations that affect borrowing limits, repayment options and eligibility for some graduate programs.
The overhaul stems from the One Big Beautiful Bill Act, a sweeping federal tax and spending statute signed into law in July 2025. The Department of Education has described the rules as an effort to simplify repayment and address student loan debt.
Most provisions took effect July 1.
Under the rule, loan amounts for undergraduates enrolled less than full time are reduced based on the number of credit hours. It also limits Parent PLUS, graduate and professional-degree loans; ends Graduate PLUS loans for most new borrowers; and creates two repayment options:
What are PLUS loans?
PLUS loans helped cover college costs left after other aid. Parent PLUS loans help parents pay remaining costs for dependent undergraduates, while Graduate PLUS loans helped graduate and professional students cover the gap between regular loans and the full cost of attendance.
Borrowers in the Saving on a Valuable Education, or SAVE, plan must choose a new repayment plan within 90 days of receiving notice from their loan servicer or they’re moved to the Standard Repayment Plan or the Tiered Standard Repayment Plan.
Those with other older plans have until July 1, 2028, to move into the Repayment Assistance Plan, the Tiered Standard Repayment Plan or Income-Based Repayment, an older income-driven plan that bases payment on 10% or 15% of discretionary income.
With limited exceptions, student borrowers receiving loans on or after July 1 face a $257,500 lifetime cap across undergraduate, graduate and professional study, according to the Education Department.
Some parts of the rollout are still changing. After a federal court temporarily paused part of the Education Department’s professional-degree definition, the department issued a temporary list of 29 programs treated as professional degrees for higher loan limits while the case continues.
Students in professional programs, like law or medical school, can borrow up to $50,000 per year and $200,000 total.
To explain what the changes mean, the Fort Worth Report spoke with Garrick Hildebrand, interim executive director of financial aid at the University of Texas at Arlington. Responses have been edited for length and clarity.
Dang Le: What are the biggest things students and families need to know about the policy changes?
Garrick Hildebrand: There are three big changes.
First, undergraduate loan eligibility is now tied to how many classes a student takes. It works more like Pell Grants: Full-time students can receive their full annual loan amount, while half-time students are eligible for half.
Second, Parent PLUS loans now have annual and lifetime limits: $20,000 per year and $65,000 total per dependent student. Those limits did not exist before.
Third, Graduate PLUS loans have been discontinued for new graduate students. Current borrowers may still qualify under old rules if they stay in the same program and finish within the allowed time.
Le: How is the undergraduate’s enrollment rule different from before?
Hildebrand: Previously, an undergraduate student enrolled at least half time — usually six credit hours — could receive up to the full annual loan limit.
Now, anything below full time and the loan amount is reduced.
Annual undergraduate loan limits did not change much: $5,500 for first-year dependent undergraduates, $6,500 for second-year students and $7,500 for third-year students or above. The change is how those amounts are awarded.
Le: What about parents and graduate students?
Hildebrand: Parents need to consider the student’s whole college plan, not just the first year.
If a family uses too much of that $65,000 total early, they may not have enough left for later. The limits may matter more for families at expensive schools, especially private institutions.
Other resources
For parents and students wanting more information about student loans, Garrick Hildebrand, interim executive director of financial aid at the University of Texas at Arlington, suggests:
Graduate students may feel some of the biggest effects. They can now borrow up to $20,500 per year and $100,000 total.
In the past, if that did not cover the full cost of attendance, students could use Graduate PLUS loans to fill the gap. That option is no longer available for most new graduate borrowers.
At UTA, that could matter most for students in expensive graduate programs, such as nursing and social work. Those students may need scholarships and grants.
Private loans can also be a valid option, but borrowers should shop around and compare lenders’ interest rates, enrollment requirements and repayment terms.
Le: Who’s eligible for the old rules, and who falls under the new rules?
Hildebrand: It depends on when the student borrowed federal loans.
Students already enrolled and who borrowed federal student loans before July 1 may fall under legacy rules. Those rules could allow them to stay under the old borrowing limits through about the 2028-29 school year, as long as they stay in the same program and finish within the allowed time.
Any student borrowing federal loans for the first time on or after July 1 is under the new rules. That could be a new college student or a current student who had not used federal loans before but needs them now.
Le: How big could the impact be for these changes?
Hildebrand: At UTA, we estimated about 200 current Graduate PLUS borrowers could possibly qualify for legacy rules. That group was relatively small compared with the overall graduate student population.
The larger impact will likely be on new graduate students because they will not have Graduate PLUS loans as an extra option.
On the undergraduate side, it has been harder to estimate the impact because the rule tying loans to course load is new. Schools had about 60 days to understand the final rules, retrain staff, update systems and tell students.
The new professional program guidance is still changing, too. For UTA, the main question is how the guidance applies to graduate nursing programs, including Master of Science in Nursing and Doctor of Nursing Practice programs.
We’re reviewing the guidance but waiting for final court guidance before making a formal policy or awarding change.
Le: Could the rules change again during the school year?
Hildebrand: Yes. The rule tying loan amounts to enrollment level is a major change that’s underexplained, and the law included specific dates for when the changes had to start. That has affected how the Education Department is rolling out the rules.
That means there could be new rules, new guidance or more court decisions after the school year starts. Schools are not working with their usual timelines, and students and families should ask questions and ensure they understand how the rules apply before accepting loans.
Dang Le is the higher education reporter for the Fort Worth Report. Contact him at dang.le@fortworthreport.org.
The Fort Worth Report partners with Open Campus on higher education coverage.
The Report’s higher education coverage is supported in part by major higher education institutions in Tarrant County, including Tarleton State University, Tarrant County College, Texas A&M-Fort Worth, Texas Christian University, Texas Wesleyan University, the University of Texas at Arlington and UNT Health Fort Worth.
At the Fort Worth Report, news decisions are made independently of our board members and financial supporters. Read more about our editorial independence policy here.
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