ay9934734@gmail.comThe Senate released its final version of the One Big Beautiful Bill last night, introducing sweeping changes to the student loan repayment system for both current and future borrowers. This comes after last-minute negotiations removed some provisions pushed by GOP lawmakers.
📌 Key Takeaways for New Borrowers
Starting July 1, 2026, students taking out new loans will face:
✅ Limited Repayment Options:
Only two plans will be available:
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A Standard Repayment Plan, and
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A new income-driven plan called the Repayment Assistance Plan (RAP).
✅ Changes in Borrowing Limits:
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Undergraduate Loans: No changes to existing limits.
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Parent PLUS Loans: Capped at $20,000 per year per student, with a $65,000 lifetime maximum.
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Graduate Students:
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Grad PLUS Loans eliminated.
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Annual borrowing capped at $20,500 with a $100,000 lifetime limit.
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Professional Students: Capped at $50,000 per year and $200,000 lifetime.
⚠️ Grace Period for Grad PLUS Borrowers:
Current graduate students can continue using Grad PLUS Loans for three academic years if they borrowed at least once before June 30, 2026.
💡 How Will New Repayment Plans Work?
🔹 Standard Plan:
Repayment length will depend on the loan amount:
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10 years: Loans of $25,000 or less
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15 years: $25,001 to $50,000
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20 years: $50,001 to $100,000
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25 years: Over $100,000
🔹 Repayment Assistance Plan (RAP):
Payments are tied to your adjusted gross income (AGI):
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Start as low as $10/month
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Max out at 10% of AGI if you earn over $100,000/year
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Borrowers will receive a $50 monthly discount per qualifying dependent
📌 Changes for Existing Borrowers
For current student loan holders, immediate changes are unlikely. However, between July 2026 and July 2028, the government plans to:
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Eliminate existing income-contingent repayment plans including ICR, PAYE, and SAVE.
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Require borrowers to transition to a modified Income-Based Repayment (IBR) plan.
🎓 What Does This Mean for You?
These changes could significantly impact how families pay for college and how existing borrowers manage repayment. The bill aims to simplify options while capping borrowing to control student debt growth.
If passed, this overhaul will reshape the US student loan landscape:
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New borrowers should plan for stricter borrowing limits and fewer repayment options.
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Existing borrowers should prepare for mandatory changes to repayment plans by 2028.
🔔 Stay updated with myfinancefuel for detailed breakdowns on how this legislation affects your student loan strategy in the coming years.
