New federal student loan regulations under the Trump administration’s One Big Beautiful Bill Act took effect on July 1, 2026, raising graduate student borrowing caps and launching two new repayment plans. [1, 2, 3, 4]
Graduate students face an annual borrowing cap of $20,500, while "professional students" in certain programs can borrow up to $50,000 annually. [1] A federal court froze the Education Department’s narrower definition of "professional degree," expanding the list of eligible programs from 11 to more than 20. [1, 3] This expanded list now includes nurse anesthetist, clinical psychology, registered nursing, physician associates, and speech-language pathology. However, theology programs were removed from the list following the court ruling. [1, 3]
Kathleen Boyd, CFP and founder of Student Loan Savvy, said, "This latest federal ruling changes the picture quite a bit ... it opens the door for more graduate programs to qualify for the higher annual federal loan limits." Valerie Fuller, president of the American Association of Nurse Practitioners, called the ruling "an important step for nurse practitioner students, the future health care workforce and the patients who depend on NPs for access to high-quality care." [1]
Two new repayment plans began July 1: the Standard tiered plan with fixed terms based on loan size, and the Repayment Assistance Plan (RAP), an income-based option replacing previous income-driven plans. [2, 4] The Standard plan sets 10-year terms for loans up to $25,000; 15 years for up to $50,000; 20 years up to $100,000; and 25 years for loans over $100,000. [2]
The RAP plan sets monthly payments from a minimum of $10 up to 10% of income, includes loan forgiveness after 30 years, and waives unpaid interest when payments are made. [2, 4] Borrowers enrolled in the federal SAVE plan have 90 days from July 1 to switch to these new repayment options. [2]
Borrowers using automatic payments receive a 1% interest rate reduction through June 30, 2028. [2]
Some borrowers expressed concern about affordability as monthly payments rise under the new plans. Sara Partridge of the Center for American Progress warned, "Millions of borrowers will face massive sticker shock this summer and autumn as they are pushed to transition into other repayment plans." Borrower Cassandra Kormendy said, "I'm scared to not pay them and what will happen." [4]
Undersecretary of Education Nicholas Kent defended the reforms, saying they aim to address "exorbitant tuition costs, unchecked borrowing, and a confusing maze of repayment options that too often leave borrowers with higher balances despite making payments." [4]
The Department of Education announced it will continue to defend its narrower definition of professional degrees in ongoing litigation despite the court freeze. [3]
The Education Department published an updated list of eligible professional degree programs on July 1, 2026, reflecting the expanded eligibility following the federal court decision. [1, 3]
