Trump Signs Bill Restricting Federal Student Loans, Impacting Graduate, Professional Borrowers Nationwide

President Donald Trump's One Big Beautiful Bill Act introduces significant federal student loan restrictions that will affect many borrowers, particularly graduate, professional, and low-income students. The bill caps Parent PLUS loans at $20,000 per year and $65,000 total, and eliminates Graduate PLUS loans starting in the 2026-27 academic year, forcing graduate students to rely more on lower-capped direct loans or private loans with fewer protections. Additionally, a $200,000 lifetime borrowing cap for all federal student loans threatens to limit funding for law students and others pursuing public interest careers, potentially reducing access to legal advocacy and increasing financial burdens. Colleges with high student loan nonpayment rates face losing federal aid, as the Department of Education has resumed tracking defaults following the pandemic pause, placing for-profit institutions and some public and private schools on a watch list. These changes, effective primarily between 2026 and 2028, are not subject to legal challenges since they are codified in law, creating a new, more restrictive landscape for student borrowing and repayment. Experts advise borrowers to carefully assess these changes and explore optimal strategies, though many students may face increased reliance on private loans and reduced federal support.