Since President Donald Trump signed the One Grand, Stunning Bill Actenacted on July 4, newfederal loan limitsare scheduled to take effect.
The legislation also released theremoval of specific loan repayment methodsand the elimination of Grad PLUS loans, causing numerous college students to reconsider how and whether they would complete their degrees, according to a recent U.S. News survey.
Why It Matters
The Big Beautiful Bill Act establishes new annual and lifetime borrowing caps for graduate and professional students, which will come into effect for new loans starting July next year. The legislation also cuts down on the number of federal repayment options available to certain borrowers, leading to immediate confusion for those who are planning to pursue graduate or professional studies.
Because of these changes, millions of current and future students may encounter increased personal expenses or less flexibility in repaying loans, according to experts, who note that these adjustments could affect enrollment numbers, the types of degrees pursued, and the use of private loans for educational funding.
What To Know
A U.S. News survey involving 1,190 college students revealed that 61 percent of respondents indicated they would be personally affected by the law, while 35 percent mentioned they were thinking about reducing their studies.
Approximately 32 percent were thinking about switching to another major, while 38 percent mentioned they were considering taking out private student loans to cover financial shortfalls.
“On social media, many students believe they’ve been misled. Not long ago, coding was promoted as the upcoming major career path. However, today, numerous coders are being substituted by AI, ironically by the technology they developed,” said Kevin Thompson, CEO of 9i Capital Group and host of the 9innings podcast.Muara Digital TeamThat has generated genuine concern about investing money and years into degrees that might not be worthwhile.
The survey also noted that student anxiety regarding college expenses grew following the law, as the percentage of those who felt “extremely” stressed increased from 24 percent to 31 percent.
Most college students indicated they do not back any of the law’s modifications, with 51 percent expressing this stance. The changes that received the most support were the limits on borrowing or the removal of specific income-based repayment options, at approximately 20 percent.
The specific effects of the GOP law on college students differ. Along with approximately one-third deciding to reduce their studies or switch majors, an additional 31 percent mentioned they might look into studying abroad to complete their education, while 26 percent were considering enlisting in the military to assist with college expenses.
“The concept of the American Dream has consistently represented the freedom and chance to achieve a better life, with higher education being one of the most effective ways to climb the socioeconomic scale,” Drew Powers, the founder of the Illinois-based Powers Financial Group, stated.Muara Digital Team. “This legislation negatively impacts student loan borrowers, particularly affecting middle- and lower-income families, who are the very groups that require support the most.
The Big Beautiful Bill Act implemented several modifications to the federal student loan system for borrowers, such as setting annual and lifetime limits on federal loans for graduate and professional students and discontinuing the Grad PLUS program for new borrowers.
The limits would restrict graduate students’ annual loan amounts to $20,500, with a total lifetime maximum of $100,000. For professional programs like medical or law school, the annual cap would be $50,000, and the overall lifetime limit would be $200,000 for loans obtained after July 1, 2026.
“That implies that students from lower-income backgrounds may end up being unable to afford it or may be forced to rely on private loans which have higher interest rates. In the long run, this could increase the disparity in access—particularly for minorities aiming to enter areas such as medicine,” Thompson said.
The government’s expectation is that eliminating subsidies will lead to a decrease in tuition fees. However, it is uncertain if this will truly occur.
Muara Digital Teamcontacted the Department of Education for a response through email.
What People Are Saying
Ellen Keast, the deputy press secretary at the Department of Education, statedMuara Digital Team: President Trump’s major new legislation represents a significant achievement for American students, families, educators, and colleges. This package aims to make higher education more accessible by removing costly loan programs, while also helping students avoid overwhelming debt and encouraging institutions to prioritize job readiness after graduation. The department has started putting this innovative law into action, with the goal of improving support for American students and borrowers.
Drew Powers, the creator of the Powers Financial Group based in Illinois, statedMuara Digital Team:This legislation effectively pushes student and parent borrowers out of the federal student loan system and into the hands of banks, which have repeatedly shown they are not supportive of borrowers. The presence of federal loans previously compelled banks to provide more competitive interest rates due to the absence of protections on the federal loan side. After borrowers exhaust their federal loan limits under the new law, banks will no longer have any reason to offer favorable terms.
Alex Beene, a financial education teacher at the University of Tennessee at Martin, statedMuara Digital Team:Future modifications in how student loans are distributed and repaid will have a major impact, making it harder, if not impossible, for students in specific income categories to access more affordable monthly payments or loan forgiveness.
Revisions in loan distribution for 2026 might also complicate obtaining federally guaranteed student loans for specific fields that don’t satisfy the updated income percentage criteria if these regulations are strictly applied. When combined with today’s elevated interest rates on new loans, it’s clear why students are hesitant about their academic future.
What Happens Next
The extensive changes introduced by the One Big Beautiful Bill Act might lead to a decrease in university enrollments, as more students choose community colleges, according to Thompson.
If the cost of attending four-year institutions remains high, the increased demand for community colleges might lead to higher tuition there as well,” Thompson stated. “If this change occurs, it could result in a larger disparity in white-collar professions, with students from lower-income backgrounds being directed more towards vocational fields.
Update 8/18/25, 4:42 p.m. ET: This piece was revised to include a statement from Ellen Keast, the Department of Education’s deputy press secretary.
Related Articles
- Student Debt News: Trump’s Proposal Might End Relief for Certain Employees
- Student Debt News: Significant Modification Expected To Influence Professional Choices
- Student Debt News: Caution Raised About Trump’s Latest Proposal
- Upcoming Social Security Wage Attachments Are Expected to Begin Soon: Key Information to Understand
Begin your free Muara Digital Team trial
