Key Updates on Student Loan Regulations Starting July 1

WHO:

ABC News - Millions of student loan borrowers are affected by the changes to federal student loans.

CBS News - Students and families are involved in the loan revamp.

WHAT:

CNN - The law, known as the "One Big Beautiful Bill Act," was signed by Trump in July 2025.

CNN - The Grad PLUS loan program, which allowed students to borrow the full cost of attendance, has been eliminated.

CNN - The new limits for graduate school students will take effect for newly enrolling students and will be $20,500 annually and $100,000 over a lifetime, while current students will see these limits implemented by July 2029.

CNN - The Parent PLUS loan will be limited to $20,000 annually and to $65,000 total over the course of a student’s studies, applicable to parents of new college students enrolling after July 1.

CNN - Borrowers who sign up for automatic payments by September 30 will get a one percentage-point break on their interest rates, lasting through June 30, 2028.

CNN - The interest rate for undergraduate loans will increase to 6.52% and to 8.07% for graduate loans.

CNN - The Department of Education is sending out notices to some federal student loan borrowers with important deadlines.

CNN - The new federal loan caps for professional programs such as medical, dental, and law school limit federal loans to $50,000 per year and a total of $200,000.

CNN - The Grad PLUS loan program, which allowed students to borrow the full cost of attendance, has been eliminated.

CNN - The median four-year cost of attendance for the class of 2026 was $297,745 for public medical schools and $408,150 for private medical schools, according to the Association of American Medical Colleges.

CNN - Nearly 43 million borrowers have student loans totaling $1.7 trillion as of March, according to the Federal Student Aid office.

CNN - The Health Resources and Services Administration projected a shortage of 87,150 primary care physicians by 2037.

CNN - Secretary Linda McMahon stated that with loan caps in place, schools will have fewer applicants, prompting them to lower tuition costs.

CNN - The Association of American Medical Colleges reported that almost half of students seeking an M.D. rely on Grad PLUS, borrowing more than $1 billion annually through the program.

CNN - The Grad PLUS loan will be eliminated, which previously allowed professional and graduate students to borrow up to the cost of attendance.

CNN - The Parent PLUS loan will be limited to $20,000 annually and to $65,000 total over the course of a student’s studies, applicable to parents of new college students enrolling after July 1.

CNN - Borrowers who sign up for automatic payments by September 30 will receive a one percentage-point break on their interest rates, which is an increase from the current .25 percentage-point discount.

CNN - The interest rate for undergraduate loans will increase to 6.52% and to 8.07% for graduate loans, effective July 1.

CNN - The law, which Trump signed last July, created a new tiered standard repayment plan and a new Repayment Assistance Plan, known as RAP.

CNN - Under the standard plan, borrowers will have between 10 years and 25 years to repay their loans depending on the amount borrowed.

CNN - In the RAP plan, borrowers’ monthly payments will be between 1% and 10% of their income, with a minimum payment of $10 a month.

CNN - Remaining balances under the RAP plan will be canceled after 30 years of payments.

CNN - New 2026 graduates have the option of selecting the new RAP or tiered standard repayment plans but also have access to existing repayment options until July 2028.

CNN - The new limits for graduate school students will be $20,500 annually and $100,000 over a lifetime.

CNN - For professional schools, borrowing will be capped at $50,000 annually and at $200,000 over a lifetime.

CNN - The Parent PLUS loan will be limited to $20,000 annually and to $65,000 total over the course of a student’s studies.

CNN - Borrowers who sign up for automatic payments by September 30 will get a one percentage-point break on their interest rates, lasting through June 30, 2028.

CNN - The interest rate for undergraduate loans will increase to 6.52% and to 8.07% for graduate loans.

ABC News - Changes to federal student loans are taking effect.

CBS News - The loan revamp affects how much students and families can borrow to pay for college, as well as their repayment options.

WHEN:

ABC News - Changes to federal student loans are taking effect as of July 1.

CBS News - New student loan rules take effect July 1.

WHY:

CNN - Critics worry that the changes will make it harder and more expensive for students to finance their education and to repay their loans afterwards.

CNN - Critics argue that the new loan caps could make medical school less accessible and exacerbate the existing physician shortage.

HOW:

CNN - The Trump administration claims that enforcing loan caps will drive down graduate school costs.

(UPDATED July 2, 2026 17:30 UTC)

President Trump has signed the "One Big Beautiful Bill Act," which eliminates the Grad PLUS loan program and introduces new borrowing limits for graduate students, set at $20,500 annually and $100,000 over a lifetime for those enrolling after July 1, while current students will see these limits by July 2029. Additionally, the Parent PLUS loan will now be capped at $20,000 per year and $65,000 total, and borrowers who enroll in automatic payments by September 30 will receive a one percentage-point reduction in their interest rates until June 30, 2028. Critics are concerned that these changes could make financing education more difficult and expensive, while the Trump administration argues that these loan caps will help reduce graduate school costs.

(UPDATED July 2, 2026 11:50 UTC)

New federal loan caps for professional programs like medical, dental, and law school will limit federal loans to $50,000 per year, with a total cap of $200,000, while the Grad PLUS loan program has been eliminated, which previously allowed students to borrow the full cost of attendance. The Association of American Medical Colleges reported that the median four-year cost of attendance for the class of 2026 is $297,745 for public medical schools and $408,150 for private ones, with nearly 43 million borrowers holding student loans totaling $1.7 trillion as of March. Critics argue that these new loan caps could make medical school less accessible and worsen the existing shortage of primary care physicians, while the Trump administration contends that these changes will ultimately drive down graduate school costs.

(UPDATED July 2, 2026 04:21 UTC)

New limits for graduate school students will soon take effect, capping annual borrowing at $20,500 and a lifetime total of $100,000 for newly enrolling students, while current students will see these limits implemented by July 2029. The Grad PLUS loan, which previously allowed professional and graduate students to borrow up to the cost of attendance, will be eliminated, and the Parent PLUS loan will now be limited to $20,000 annually and $65,000 total for parents of new college students enrolling after July 1. Additionally, borrowers who sign up for automatic payments by September 30 will receive a one percentage-point reduction on their interest rates, while the interest rates for undergraduate loans will rise to 6.52% and to 8.07% for graduate loans, effective July 1.

(UPDATED July 1, 2026 21:24 UTC)

President Trump has signed a new law that introduces a tiered standard repayment plan and a Repayment Assistance Plan, or RAP, for student loans. Under the RAP, borrowers will pay between 1% and 10% of their income monthly, with remaining balances canceled after 30 years, while new graduates can choose this plan or existing options until July 2028. Additionally, the law sets borrowing limits for graduate students at $20,500 annually and $100,000 over a lifetime, with interest rates rising to 6.52% for undergraduate loans and 8.07% for graduate loans.

(UPDATED July 1, 2026 19:37 UTC)

Millions of student loan borrowers are set to be impacted by significant changes to federal student loans, which are taking effect as of July 1. These adjustments will alter how much students and families can borrow for college and modify their repayment options. The loan revamp is designed to provide new guidelines for managing student debt moving forward.