Federal Student Loan Changes
What Students & Families Need to Know
Effective July 1, 2026
Recently, Congress passed the “One Big Beautiful Bill” Act, which makes several changes to federal student loan programs. Below is a clear breakdown of what’s changing, what’s staying the same, and how it may impact undergraduate students, graduate students, and parents.
RISLA is here to help you understand your options and plan with confidence.
Federal Changes
One Big Beautiful Bill – Key Changes Starting July 1, 2026
Beginning July 1, 2026, several changes to federal student loan programs will affect graduate students and parents, while undergraduate loan limits remain unchanged. These changes may influence how families finance college and graduate education moving forward.
What does this mean?
Understanding these changes early can help you make informed borrowing decisions and explore alternative funding options if needed.
👉 RISLA Tip: Start planning now—loan availability and limits may affect future education costs.
Who is affected by these changes?
Undergraduate Students
No Changes to Federal Loan Limits
There are no changes to federal student loan limits for undergraduate students.
Annual Federal Direct Loan Limits (Unchanged):
- Year 1: $5,500
- Year 2: $6,500
- Years 3–5: $7,500
These limits apply to eligible students borrowing through the Federal Direct Loan Program.
✔️ Federal benefits such as fixed interest rates, Repayment Assistance Plan (RAP), and Public Service Loan Forgiveness (PSLF) remain available.
Graduate Students
Changes to Graduate Borrowing Options
Starting July 1, 2026:
- Grad PLUS Loans will no longer be available for newly enrolled graduate students.
- Graduate students may borrow up to $20,500 per year through the Federal Direct Unsubsidized Loan Program.
- Aggregate loan limits will vary by degree program.
What does this mean?
Graduate students may need to carefully budget education costs or explore additional funding options beyond federal loans.
For Parents
New Limits on Parent PLUS Loans
For parents of newly enrolled students beginning July 1, 2026:
- Maximum annual borrowing limit: $20,000 per student
- Aggregate borrowing limit: $65,000 per student
- Borrowing up to the full cost of education through Parent PLUS Loans will no longer be available.
What does this mean?
Families may need to combine federal loans, savings, scholarships, or alternative financing options to cover remaining college costs.
Explore Student Loan Options Built for Savings and Ease
Get informed. Plan smart. Borrow responsibly.
Federal Loan Consolidation
Keep Your Loans Federal—With One Monthly Payment
Federal Direct Loan Consolidation allows borrowers to combine multiple federal student loans into a single loan while remaining within the federal system.
Key benefits include:
- One simplified monthly payment
- A weighted-average interest rate (rounded up slightly)
- Continued eligibility for federal benefits such as:
- Public Service Loan Forgiveness (PSLF)
- Income-Driven Repayment (IDR) plans
✔️ Federal consolidation does not remove federal borrower protections.
Private Student Loan Refinancing
Understand the Difference Before You Decide
Private student loan refinancing involves a private lender paying off existing federal and/or private loans.
Potential benefits:
- Lower interest rates for qualified borrowers
- Simplified repayment options
Important considerations:
- Federal protections—such as PSLF, IDR plans, and deferment options—are not retained when federal loans are refinanced with a private lender.
- Approval and rates are based on creditworthiness.
👉 RISLA Reminder: Refinancing is not the same as federal consolidation—always compare options carefully.
Plan Ahead with RISLA
We’re Here to Help You Navigate What’s Next
Federal loan changes can feel overwhelming—but you don’t have to navigate them alone. RISLA provides trusted, responsible guidance, education planning support.
Speak With Our Loan Specialist
Get answers, guidance, and support at every step of your student loan journey.
Start Your Student Loan Application
Start your student loan application quickly and confidently with a trusted nonprofit lender.
Explore Your Rates & Options
Explore rates and options to see what may work for you before submitting a full application.