The student loan changes to know before Big Beautiful Bill changes kick in July 1

Big Beautiful Bill student loans are about to go into effect, so borrowers better buckle up.Starting July 1, 2026, Federal student loan borrowers are about to enter a new era of repayment and borrowing rules.One that will have major consequences for both people who are already paying off loans, as well as families planning to borrow for the fall 2026 semester.The changes were enacted into law by the One Big Beautiful Bill Act (OBBBA), passed by Congress last year, which overhauled major parts of the federal student loan system.

Many of the biggest changes take effect July 1, 2026, including new borrowing limits for graduate students and Parent PLUS borrowers, the end of Grad PLUS loans for most new borrowers, and the launch of new repayment options.Robert Farrington, founder of The College Investor, says borrowers should not underestimate the scale of the shift to the new Trump student loans era.“We’re coming up on July 1, which is the implementation date of most of the One Big Beautiful Bill changes,” Farrington said.“Honestly, it is going to be one of the most sizable changes to the federal student loan program ever.”The changes affect two groups differently: people who already have federal student loans and people who plan to borrow after July 1.For existing borrowers, the first thing to know is that federal repayment plans are being simplified.

But there’s a catch.Some repayment plans — the ones with the most generous terms — will continue to operate until 2028.Beginning July 1, two new repayment options become available to borrowers: the Repayment Assistance Plan (RAP) and a new Tiered Standard repayment plan (TSRP).

RAP is an income-driven repayment plan that bases payments on adjusted gross income and the number of your dependents.The Tiered Standard plan is a fixed-payment plan with a repayment term that depends on the borrower’s balance.Farrington described the Tiered Standard plan as a hybrid of the current standard and extended repay...