New federal student loan limits and repayment rules take effect

New federal borrowing limits and fewer repayment options for parents, undergraduates and graduate students take effect Wednesday. The updated rules cap the amount parents can borrow under the Parent PLUS program and restrict the number of repayment plans available to borrowers. Officials said the measures aim to control program costs and align repayment terms across loan types.

Changes for different borrower groups Parents borrowing through the Parent PLUS program face new annual and aggregate limits that did not previously apply. Undergraduates and graduate students will have fewer income-driven repayment plans from which to choose.

The policy applies to loans disbursed on or after the effective date. Borrowers with existing loans retain their current repayment options.

Implementation details Loan servicers have updated their systems to reflect the new limits and plan selections. Borrowers applying for loans this week will receive disclosures outlining the revised terms.