New Federal Student Loan Caps and Repayment Changes Set for July 1, 2026

President Donald Trump's student-loan repayment overhaul will take effect on July 1, 2026, Business Insider reported. The overhaul ends the program that allowed graduate students to borrow the full cost of attendance and introduces new borrowing caps for students and parents, including advanced degrees.

The new borrowing caps will be implemented in summer 2026, with some provisions phased in by 2028.

Borrowers enrolled in a program of study as of June 30, 2026, qualify for an exception to the new loan limits, according to Federal Student Aid. This exception also applies to borrowers who received at least one direct federal loan or whose parent received a parent PLUS loan for that program prior to July 1, 2026.

Additionally, borrowers enrolled at the same institution and pursuing the same credential after July 1, 2026, qualify for the exception.

Borrowers who qualify for the exception retain prior loan limits for either three academic years or the difference between the program's expected length and the amount completed, whichever is shorter. The overhaul includes a new income-driven repayment plan but also eliminates the SAVE repayment plan, which currently has 7 million borrowers enrolled.

Starting in July 2026, these borrowers will begin receiving details about their 90-day timeframe to switch to a new repayment plan.

“Borrowers enrolled in a program as of June 30, 2026, qualify for an exception to the new loan limits," Federal Student Aid stated. > "In July 2026, the 7 million SAVE borrowers will begin learning details of their 90-day timeframe to switch to a new repayment plan," Business Insider reported. The changes mark a significant shift in federal student loan policy, particularly affecting graduate students and those currently enrolled in federal repayment plans.”