Overview

• House approved the GOP tax-and-spending reconciliation package including student loan reforms on a party-line vote July 3 with Trump set to sign it by July 4.
• The bill phases out existing income-driven plans (ICR, PAYE, SAVE) and confines new borrowers to either the Standard repayment option or a new 30-year Repayment Assistance Plan.
• Graduate PLUS loans are eliminated, graduate Stafford borrowing is capped at $20,500 per year (with a $100,000 aggregate limit), and professional loans at $50,000 annually (with a $200,000 cap).
• Parent PLUS loans face a $65,000 lifetime cap and will lose access to any income-driven repayment or most forgiveness programs, including PSLF for new loans.
• Economic hardship and unemployment deferments are removed and discretionary forbearance restricted to nine months per 24-month period, with major provisions phased in from July 2026 through mid-2028.