Big Changes Are Coming to Student Loans. Here’s What to Know if You’re Struggling.

High school seniors planning to attend college in the fall of 2026 will face a significantly different landscape when it comes to federal student loans, compared to previous years.
‘The One Big Beautiful Bill’ made many changes to student loans, most of which will take effect on July 1, 2026. Some of these updates will affect existing borrowers, but the majority of the changes will affect current college students and high school seniors preparing for college.
Stricter Loan Limits For Families
Lending limits for subsidized and unsubsidized loans that are taken out by undergraduate students will remain the same. However, parents or grandparents who want to help their student pay for college with a Parent PLUS loan will be subject to new loan limits.
Currently, Parent PLUS loans allow parents and grandparents to borrow up to the student’s cost of attendance, minus any financial aid they receive. There is currently no aggregate limit on the total dollar amount of Parent PLUS loans that can be taken out for a student’s education.
However, families of high school seniors entering college in the fall 2026 semester can only borrow up to $20,000 a year, and will have an aggregate limit of $65,000 per child.
Nearly three in ten Parent PLUS loan borrowers are expected to be affected by the new limits, reducing how much they can pay for their child’s school, according to a Brookings Institution analysis of data from the National Center for Education Statistics. In particular, these new limits are expected to hurt mostly middle-to-higher income families that are not eligible for Pell Grants and require other financing.
Experts recommend that families who encounter financing problems due to the new limits explore alternative sources of funding, such as federal aid, scholarships, or private student loans.
A Whole New Repayment System
College students who take out a student loan on or after July 1, 2026, even if they’ve taken out loans previously, will have a drastically different repayment system available to them once they graduate. That means these repayment plan changes will affect all high school seniors and families who take out student loans, as well as many current college students.
Currently, borrowers have three standard repayment plan options, including the 10-year standard plan, which spreads fixed payments across 10 years. If borrowers want to remain on a standard plan but lower their monthly payment, they also have the option of an extended or a graduated standard plan.
For those who want to lower their payments even more, there are currently three income-driven repayment plans, which adjust monthly payments to fit the borrowers’ income and family size. However, two of these repayment plans will be eliminated in 2028.
College students and their families who borrow undergraduate student loans or Parent PLUS loans after July 1, 2026 will automatically be placed in a standard plan that adjusts repayment periods based on the loan size. Depending on the amount of their loan, borrowers will have 10 to 25 years in fixed payments.