In a move aiming to reshape the landscape of student loans in the U.S., President Donald Trump’s administration has reached a pivotal moment in its plan to revamp repayment structures. The Department of Education has completed negotiations on significant changes, marking a substantial step forward in this initiative.
As of November 6, negotiations concluded on the alterations to student-loan repayment and borrowing policies signed into law as part of Trump’s spending legislation passed in July. These discussions, which began in October, focused on replacing current income-driven repayment plans and implementing new borrowing limits for graduate and professional students. The agreed changes are expected to be formally drafted into a rule and opened for public comment early next year, with implementation slated for July 2026.
The new legislation will see the end of the Grad PLUS program, previously allowing graduate students to borrow up to their program’s full attendance cost. Instead, new caps will be introduced: $20,500 annually or $100,000 over a lifetime for graduate students, and $50,000 annually or $200,000 over a lifetime for professional students.
Additionally, the Department of Education plans to overhaul existing income-driven repayment options by introducing a standard repayment plan and a new Repayment Assistance Plan, offering loan forgiveness after 30 years.
According to Undersecretary of Education Nicholas Kent, “The consensus language agreed upon by the negotiators today will help drive a sea change in higher education by holding universities accountable for outcomes and putting significant downward pressure on the cost of tuition. This will benefit borrowers who will no longer be pushed into insurmountable debt to finance degrees that do not pay off.”
Key repayment and borrowing changes
During negotiations, concerns were raised about the Department’s proposed definition of a professional student. The new definition limits eligibility for the elevated borrowing cap to those enrolled in one of ten specified programs. Despite concerns that this could impact participation in healthcare professions, the Department noted that over 2,000 doctoral programs would meet the new criteria.
Todd Pickard, president of the American Academy of Physician Associates, expressed apprehension, stating, “At a time when the need for healthcare services is rapidly expanding, restricting access to financial support for future healthcare providers is a step in the wrong direction. Without a sustainable pipeline of trained clinicians, patient access to care and health outcomes will continue to decline.”
Although Undersecretary Kent acknowledged that the proposal is “by far not the perfect proposal,” he emphasized the effort to find a middle ground, stating, “We have a really challenging job in front of us, but I think what we did in our proposal is to meet you all at least halfway.”
Furthermore, the Department plans a phased approach for existing borrowers. Those who borrowed before July 1, 2026, will still have access to income-based repayment, whereas new borrowers will be eligible for the new Repayment Assistance Plan.
