The Department of Education has finalized crucial changes to student loan repayment, as part of President Donald Trump’s plan. This phase culminated on November 6, after negotiations that began in October. The focus was on two main areas: overhauling income-driven repayment plans and implementing new borrowing limits for graduate and professional students.
Key Changes to Student Loan Repayment
- Elimination of Grad PLUS Program: This program allowed graduate students to borrow the full cost of their education.
- New Borrowing Caps:
- Graduate students can borrow up to $20,500 annually, with a lifetime cap of $100,000.
- Professional students can borrow up to $50,000 annually, with a lifetime cap of $200,000.
- Plans to Replace Income-Driven Repayment:
- A standard repayment plan will be introduced.
- A new Repayment Assistance Plan will include loan forgiveness after 30 years.
Undersecretary of Education Nicholas Kent emphasized that these changes are designed to hold universities accountable and reduce tuition costs. “This will benefit borrowers who will no longer be pushed into insurmountable debt,” he stated.
Concerns Regarding Eligibility and Healthcare Professions
Negotiators expressed concerns about defining a professional student. Eligibility for the higher borrowing cap will now require enrollment in one of 10 specific programs, which some argue could limit access for future healthcare providers. However, the Department indicated that over 2,000 doctoral programs would be recognized under this new definition.
Todd Pickard, president of the American Academy of Physician Associates, commented on the restrictions, noting, “Restricting access to financial support for future healthcare providers is a step in the wrong direction.” He indicated that such limitations could jeopardize patient access to care.
Implementation Timeline
The Department of Education plans to phase in these changes, with new rules aiming for early public comment in the coming year. Importantly, borrowers with loans disbursed before July 1, 2026, will still be able to access income-based repayment options. Those taking out loans after this date will qualify for the new Repayment Assistance Plan.
As these significant changes take shape, stakeholders will continue to monitor their implications for students and educational institutions alike.
