Overview

• The reconciliation bill was approved by the House on a 218-214 party-line vote on July 3 and now awaits President Trump’s anticipated signature.
• ICR, PAYE and SAVE plans will be phased out from July 2026 to July 2028, directing all borrowers to a modified IBR plan or the new 30-year Repayment Assistance Plan (RAP).
• The Graduate PLUS program will be eliminated and graduate Stafford loans capped at $20,500 per year ($100,000 lifetime) with professional loans capped at $50,000 per year ($200,000 lifetime).
• Parent PLUS borrowing will be limited to a $65,000 total cap with new loans ineligible for income-driven repayment or forgiveness programs, including Public Service Loan Forgiveness.
• Economic hardship and unemployment deferments will be removed, discretionary forbearance capped at nine months over any 24-month period, and defaulted loans can be rehabilitated twice with a $10 monthly minimum payment.