Trump Signs Bill Ending Multiple Federal Student Loan Plans

President Donald Trump signed the $3.3 trillion budget reconciliation bill, dubbed the 'big, beautiful bill,' into law, instituting significant changes to the federal student loan program that will take effect starting July 1, 2026. The legislation eliminates several income-driven repayment plans, consolidating repayment options to a modified Standard Repayment Plan and a new Income-Based Repayment Assistance Plan (IRAP), with current borrowers required to transition by July 1, 2028. The bill also introduces borrowing limits for graduate and parent PLUS loans, including a $65,000 cap for Parent PLUS loans and the elimination of Income Based Repayment eligibility for those loans, while Pell Grant eligibility is restricted to full-time students only. Republicans argue the bill will simplify repayment and save the government $278 billion by 2034, but critics warn it will make higher education less affordable and disproportionately impact marginalized communities reliant on federal aid. The legislation also cuts Medicaid and Supplemental Nutrition Assistance Program funding, which could further strain low-income households. Despite opposition and a lengthy House debate, supporters claim the bill will strengthen the economy and government finances over the long term.