"The 'One Big Beautiful Bill' was signed into law on July 4, 2025, but a lot of those changes don't go into effect specifically for student loans until July 1, 2026," says Prep Expert CEO Shaan Patel. "It has huge implications for parents and students."
Students planning to start graduate school in or after Fall 2026 will need to seek alternative financing. That July 1 date marks the discontinuation of the Federal Graduate PLUS program.
Patel says another big change -- fewer options to repay your student loans.
"Previously, parents and students had about half a dozen options to choose from," Patel said. "Now, there's really just two different options. One is a standardized option to repay your student loans, and the second is an income-driven option."
The standard repayment option can be a 10 to 25-year term based on how much the student is borrowing.
"If you're borrowing less than $25,000 for your higher education, you'll be on a 10-year standard term," Patel said. "If you're borrowing over $100,000 to pay for your higher education, then you'll be on a 25-year term. Those are the standard options."
The Repayment Assistance plan option is an income-driven repayment.
"You used to have 20 or 25-year options for loan forgiveness with those IDRs," Patel said. "Now, you have to be on those repayment assistance plans for up to 30 years."
Patel says another option to consider is the Parent Plus.
"One strategy, if you have multiple siblings in the household, is to have a parent take out a loan and be associated as a dependent for one child, and the other parent take out the loan for the other child, because you'll get better rates and won't get dinged for having that first loan for the first child," Patel said.
Current borrowers can voluntarily switch to the new Repayment Assistance Plan.
"Reach out to your student loan provider and make sure that you are getting grandfathered into your existing option," Patel said.
There are financial aid options, including grants and scholarships, and it's never too early to get a college 529 account started.
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