What changed for student loans on July 1, 2026?

OBBBA launched the new income-driven RAP repayment plan, ended the SAVE plan, eliminated Grad PLUS loans for new graduate programs, capped Parent PLUS borrowing at $20,000 per student per year ($65,000 lifetime), and set new annual and lifetime limits on most federal loans. New borrowers now choose between RAP and a fixed standard plan.

What are the new federal student loan borrowing limits in 2026?

Graduate students can borrow up to $20,500 a year with a $100,000 lifetime cap, professional students up to $50,000 a year with a $200,000 lifetime cap, and most federal loans are subject to a $257,500 overall lifetime limit. Parent PLUS is capped separately at $20,000 per student per year and $65,000 per dependent.

What should current borrowers do after the SAVE plan ended?

Log in at studentaid.gov, confirm which repayment plan you are on, and compare the new RAP plan with the tiered standard plan to pick the best fit for your income and goals. If you are pursuing Public Service Loan Forgiveness, recheck that you are on a qualifying plan, since this directly affects your progress.

What to Do After July 1, 2026: The New Student Loan Rules Checklist

Q: Do the old loan rules still apply if I borrowed before July 1, 2026?

Often yes, for a limited window. Existing Parent PLUS borrowers who borrowed for a student before July 1, 2026 can generally continue under the old limits for up to three more years or until the program ends, and graduate students already borrowing in their current program may keep limited Grad PLUS access for up to three additional years.

Q: What should parents and new students do about the new caps?

Plan around the limits before borrowing. With Parent PLUS capped and Grad PLUS gone, families may need to cover gaps with savings, scholarships, or private loans, so build a funding plan early. Borrow federal loans first and only what you need, and Parent PLUS borrowers should check the June 30 consolidation deadline to protect repayment options.

On July 1, 2026, the One Big Beautiful Bill Act (OBBBA) changes federal student loans in major ways: a new RAP repayment plan launches, Grad PLUS loans end, Parent PLUS borrowing is capped at $20,000 a year and $65,000 per student, new annual and lifetime borrowing limits take effect, and the SAVE plan is gone. If you or your student borrows federal loans, here is a clear checklist of what to do now and after the deadline.

These changes are the biggest overhaul of federal student aid in years, and the details depend on whether you borrowed before or after July 1, 2026. This guide pulls the whole picture together so you can act in the right order. For the full background, start with our complete guide to student loans in 2026.

What actually changed on July 1, 2026?

OBBBA replaced the old repayment system and tightened how much families can borrow. New borrowers now choose between the income-driven RAP plan and a fixed standard plan, Grad PLUS loans are eliminated, and new caps limit annual and lifetime borrowing across most federal loans.

The headline changes:

RAP launched: a new income-driven plan paying 1% to 10% of income; see our guide to RAP.
SAVE ended: the old plan is gone; read the SAVE plan is ending.
Grad PLUS eliminated: graduate students lose access to Grad PLUS for new programs.
New borrowing caps: annual and lifetime limits now apply to most federal loans.

What are the new borrowing limits?

OBBBA sets firm caps on how much students and parents can borrow. Graduate students can borrow up to $20,500 a year ($100,000 lifetime) in unsubsidized loans, professional students up to $50,000 a year ($200,000 lifetime), and a $257,500 lifetime cap applies across most federal loans. Parent PLUS is capped separately.

The key numbers to know:

Parent PLUS: $20,000 per student per year, $65,000 lifetime per dependent.
Graduate students: $20,500 per year, $100,000 lifetime.
Professional students: $50,000 per year, $200,000 lifetime.
Overall: a $257,500 lifetime limit on federal loans (excluding Parent PLUS).

Do the old rules still apply if I borrowed before July 1?

In many cases, yes, for a limited window. Existing Parent PLUS borrowers who borrowed for a student before July 1, 2026 can generally continue under the old limits for up to three more years or until the program ends. Graduate students who already borrowed in their current program may keep limited Grad PLUS access for up to three additional years.

These grandfather windows are why timing matters so much this year. If you have older loans or an in-progress degree, check the exact transition rules before assuming the new caps apply to you.

What should current borrowers do now?

Current borrowers should confirm their repayment plan, since SAVE has ended and plans are shifting. Find out what plan you are on, compare RAP with the new tiered standard plan, and make sure you are enrolled in a plan that fits your income and goals. If you are pursuing forgiveness, this step is critical.

Your action items:

Log in at studentaid.gov and confirm your current repayment plan.
Compare options with RAP and the new tiered standard repayment plan.
If you work in public service, recheck PSLF with our PSLF in 2026 guide.
Review income-driven choices in income-driven repayment plans compared.

What should parents and new students do?

Parents and new students should plan around the new caps before borrowing. With Parent PLUS limited and Grad PLUS gone, families may need to fill gaps with savings, scholarships, or private loans, so build a funding plan early. Borrow federal first, only what you need, and know your limits before you sign.

If you are a Parent PLUS borrower, the June 30 consolidation deadline may protect your repayment options, so act before it passes. Then build your full funding stack with our how to pay for college guide.

Your next step

The July 1, 2026 rules reward families who act in order: confirm your repayment plan, learn the new borrowing caps, use any grandfather window you qualify for, and build a funding plan before you borrow. Start with our complete 2026 student loan guide, check the official details at studentaid.gov, and create your free CollegeLens plan to map out how much to borrow under the new rules.

You're doing the hard, smart work of getting ahead of a confusing change. That's exactly how families stay in control of their borrowing.

-- Sravani at CollegeLens