What You Need to Know About the New Rules for Student Loans

Whether you're paying off education debt now or planning to borrow in the future, get ready for bigger payments and lower loan limits.

- FAMILY FINANCES BY KERRI ANNE RENZULLI

SWEEPING changes are coming to student loans, courtesy of President Trump's Big Beautiful Bill. Almost everyone with a federal loan for higher education will be affected—including the more than 9 million Americans older than age 50 with student loans—as well as families who will need to borrow in the future to cover college costs.

The new rules, which kick in next July, reduce the number of payment plans available to families to repay college loans to a single option for parents and two for students, based on loan size or income. The amount families can borrow will be sharply limited, too. And while many provisions affect future borrowers only, some families who are already repaying loans will be forced to switch plans as well.

The net effect? “The bill simplifies the student loan repayment process, since currently there are a lot of similar plans that cause borrowers confusion,” says Betsy Mayotte, president and founder of The Institute of Student Loan Advisors. “But it will also cause many borrowers’ payments to go up fairly significantly, and its limitations on the amounts that parents and students can borrow will reduce access to college and choice of schools for many families.”

Whether you’re currently paying off education loans, you’re helping a child manage student debt, or you will need to borrow for future college bills, the new law will likely shake up your plans. Here’s what you need to know about the changes to come.

IF YOU ARE REPAYING PARENT LOANS NOW

Some 3.6 million Americans are currently paying back a loan—an average of $31,750, according to the Department of Education—taken out under the federal Parent PLUS program to help their child get a college degree.