President Trump signed the “One Big Beautiful Bill” Act into law on July 4, 2025, bringing about significant changes for many Americans [1]. One of the bill’s changes is a restructuring of federal borrowing and, consequently, repayment plans. One group in particular will be heavily affected by these changes: graduate students. The Education Data Initiative estimates that around 61 percent of graduate students in the United States borrow money from the federal government to finance their education, indicating that a modification to current systems would have drastic consequences [2]. Prior to the bill’s implementation, there was an existing federal borrowing program known as Grad PLUS. However, the bill will phase out this program and implement a new set of requirements and limitations on borrowing. In addition to an entirely new borrowing program, some existing repayment plans will be replaced. Opponents argue that new, more restrictive loan limits will make graduate programs out of reach for some, while advocates argue that it will put a stop to ballooning student debt. Given that the modifications proposed by the bill have not been implemented yet, it is unclear whether the positives will outweigh the negatives or vice versa. Regardless, it is imperative for graduate students to understand how changes to current systems will impact the viability of their education and how their education will be financed. This article explains clearly how the “One Big Beautiful Bill” Act directly impacts borrowing and repayment plans, as well as highlights potential options for students who will be unable to finance their education solely through federal loans. 

Elimination of Grad PLUS

A primary change brought about by the new legislation is the elimination of the Grad PLUS program—a nearly twenty-year-old program designed to give financial aid to students attending graduate school.  Prior to President Trump’s bill, Grad PLUS was a popular avenue for students seeking federal loans because these loans covered the full cost of tuition at fixed interest rates [3]. Before Grad PLUS, graduate students were primarily reliant on Direct Unsubsidized Loans, which typically did not cover the entire tuition, leading students to the private market for remaining costs [4]. This made Grad PLUS revolutionary, as students were no longer having to look toward private loans to cover their entire cost of attendance, and while Direct Unsubsidized Loans have a lower, fixed interest rate, Grad PLUS was appealing because of its cost coverage capacity [5].  Federal Student Aid reports from the 2023-2024 academic year indicate that over 444,000 students utilized Grad PLUS loans to finance their education. With the passage of the “One Big Beautiful Bill” Act, Grad PLUS will be eliminated on July 1, 2026, and Direct Unsubsidized Loans will once again be the only option available, with new limits being imposed. Starting July 1, 2026, graduate student loans will have a limit of $20,500 per year and a lifetime limit of $100,000. Graduate students enrolled in “professional” programs will have increased limits—$50,000 per year and $200,000 in aggregate [6]. Opponents of the new legislation cite worries that Grad PLUS’s elimination will make more expensive programs out of reach for some students, as they are unable to access loans that meet the full cost of attendance. However, advocates argue that the bill’s new limits will save taxpayers billions, with the Congressional Budget Office estimating $300 billion saved over the next ten years. Proponents also argue that newly introduced limits will encourage institutions to lower their tuition, as the previous availability of unlimited loans led to increasing tuition [7].

Graduate vs. Professional Programs

A controversy highlighted by the bill is the difference between regular graduate programs and programs deemed “professional,” with the bill itself not explicitly differentiating the two. The need for a distinction between the two is very important, as students enrolled in professional programs are allotted significantly larger loan amounts. Currently, the Higher Education Act of 1965 is the prevailing precedent of what constitutes a professional program. The act defines a professional program as one that furthers student knowledge beyond that of a bachelor’s program and provides them with the skills necessary to practice a specific profession [8]. Many have argued that this current understanding of professional programs is unclear, leaving students wondering whether or not they are able to access larger loans. Supporters of greater restrictions on loan amounts have even gone as far as warning the Department of Education to “beware” of programs “masquerading” as professional. Such supporters argue that certain institutions will reclassify their programs as professional to gain access to increased loan amounts [9].

Given such recent uproar, the Reimagining and Improving Student Education Committee within the Department of Education recently engaged in discussions to provide increased understanding regarding the bill’s provisions. More specifically, the committee engaged in many discussions regarding the implementation of a clear definition for professional programs. On Wednesday, November 5, 2025, Secretary of Education Nicholas Kent provided the department’s proposal for a new definition for professional programs. The department outlines that a professional degree “signifies both completion of the academic requirements for beginning practice in a given profession and a level of professional skill beyond that normally required for a bachelor’s degree” [10]. Given their new definition, the department also provides specific degrees that can be regarded as “professional,” including medicine, law, theology, and more. The committee also includes the fact that professional degrees generally provide a “licensure” for students to begin practicing their professions. The next day, the committee reconvened and approved the proposals discussed, including the official definition for a professional program [11].

Restructured Repayment Plans

In addition to loan limits, the “One Big Beautiful Bill” Act restructures repayment plans and introduces a new one. Currently, borrowers have various Income-Driven Repayment plans to choose from, but President Trump’s bill is set to eliminate almost all of these plans. IDRs are designed to accommodate borrowers’ income and family size, with the government describing it as a “more manageable” outlet for loan repayment in comparison to a standard plan, which involves fixed monthly payments [12]. The existing plans that are set to be eliminated by July 1, 2028, include the SAVE plan, PAYE plan, and ICR plan. SAVE, which stands for Saving on a Valuable Education, was implemented during the Biden administration in 2023 and is designed to more generously help individuals dealing with debt. Many saw SAVE as the most generous income-driven repayment plan because it uses a lower percentage of discretionary income, which leads to lower monthly payments in comparison to other plans [13]. Borrowers currently under the SAVE plan will be expected to switch to a different plan by July 1, 2028,  along with those under the PAYE (Pay As You Earn) plan and ICR (Income-Contingent Repayment) plan [14]. In addition to the July 1, 2028 deadline, these plans will be officially unavailable to new borrowers starting July 1, 2026. 

Starting July 1, 2026, all new borrowers will be expected to enroll in a Standard Repayment Plan or the newly introduced Repayment Assistance Plan. However, borrowers currently enrolled in SAVE, PAYE, or ICR will also have the Income-Based Repayment plan as an option between July 2026 and July 2028 [15]. IBR still remains an option because, unlike other plans, it is a congressional statute, and thus, cannot be terminated through executive function [16]. The only plan not based on income is the Standard Repayment Plan, which charges borrowers a fixed amount over a ten-year period [17]. The standard plan may be out of reach for many, as monthly payments are higher compared to payments under plans that are based on income. The decision between IBR and RAP for current borrowers is difficult, as both plans could be more forgiving depending on individual income and family size. IBR, an option for current borrowers, calculates monthly payments by using 10–15 percent of one’s discretionary income. However, the Repayment Assistance Plan calculates monthly payments by using one to 10 percent of one’s Adjusted Gross Income, with payments decreasing by $50 per child. Thus, RAP may be a more forgiving plan for borrowers with children [18]. Another factor that could aid in decision-making is loan forgiveness. Loan forgiveness occurs when borrowers under IDRs have been paying their debts for about 25 years, equaling 300 total monthly payments [19]. However, unlike other IDRs, the RAP plan does not offer loans to be forgiven until borrowers have been paying monthly for 30 years, equaling roughly 360 total payments. Thus, for informed decision making, current graduate student borrowers must consult their own financial statuses to choose between IBR or RAP, but for those not borrowing until July 2026, RAP will be the only income-based option. 

Looking Toward Private Lending

The elimination of Grad PLUS will force many students to look toward the private loan market to cover the full cost of their programs—a potentially risky substitute. With the introduction of loan limits, it is important to understand the differences between federal borrowing and private borrowing for conscious decision-making. In terms of eligibility, as long as a student attends an academic institution, they are eligible for a federal student loan, known as a direct unsubsidized loan. However, for private lending, the decision lies heavily in the lenders’ hands, with students having to present proof of credit or cosign with someone if they have no credit history. 

Another distinct difference comes down to federal loans’ repayment plans. Even with recent limits, there is at least one income-based repayment option for those who choose to take out federal loans. However, private loans typically do not offer repayment plans that are based on income, which can be preferable for borrowers who cannot commit to a permanently fixed amount per month [20]. One of the most prominent issues regarding the differences between the two comes down to interest rates. Figures estimate that interest rates from private market loans could reach as high as 10 percent more than interest rates from federal loans [21]. Thus, even with the availability of private loans, a perfect substitute does not exist for students who relied on Grad PLUS and previously existing repayment plans.

Also, potentially increased reliance on private lending comes at a time when the Trump administration is determined to dismantle the Consumer Financial Protection Bureau. The CFPB is an independent federal agency designed to oversee financial markets, and according to the CFPB’s website, its mission is to “protect consumers from unfair, deceptive, or abusive practices and take action against companies that break the law” [22]. The private loan market is an area that the CFPB oversees. Thus, some experts are worried that Trump’s dismantling of the bureau will lead to no oversight of these private markets [23]. On November 11, 2025, the Trump administration deemed funding from the Federal Reserve to the CFPB as “unlawful”, increasing efforts to abolish the bureau. With severely restricted funding, the CFPB reported that its operations cannot continue past early 2026 [24].

With increasingly limited borrowing and repayment plans being put into place, knowledge of such changes is crucial for prospective and active graduate students. Following July 2026, many plans that students had previously planned to enroll in will be completely unavailable, and following July 2028, many plans that students may be currently enrolled in will be phased out completely. Thus, planning ahead for what types of loans and repayment plans students will be using is essential, and such decision-making is contingent on the possibility that a student is even able to attend graduate programs, especially given the closure of Grad PLUS. Given that no plans have been completely implemented, it will be extremely important to observe the functionality of the Trump administration’s plans, as well as whether the bill’s implementation will lead to a greater good or end up hindering the education of many Americans. President Trump’s bill will undoubtedly affect many Americans, especially with worries that many will be unable to attend certain graduate programs and institutions. Whether or not this move will benefit the economy as a whole is yet to be seen. Even if new limits save taxpayer dollars, lower enrollment rates could negatively affect certain institutions and potentially affect employment rates in the long run, as fewer educated people would mean scarcity in professions like medicine or law. Further, loan limitations could alienate those from lower-income backgrounds to accessing such professions.  Nonetheless, awareness of changes is crucial for prospective and active graduate students, especially given the fact that options will be limited in the near future.