New federal student loan limits take effect Wednesday

New limits on federal student loans take effect Wednesday, impacting borrowing options for students and parents under provisions of the One Big Beautiful Bill Act, President Donald Trump’s tax reform and spending law.

The changes affect the Grad PLUS and Parent PLUS loan programs. The Grad PLUS program previously allowed graduate students to borrow up to the full cost of their education without aggregate or lifetime limits. The act eliminates Grad PLUS loans and introduces new borrowing limits for graduate and professional students starting Wednesday.

The Parent PLUS program, which allowed parents to borrow the full cost of attendance to support their dependent undergraduate children, now faces new restrictions.

The Trump administration said the changes aim to curb excessive borrowing, encourage institutions to evaluate their costs, and prevent borrowers from taking on debt they may struggle to repay.

These changes do not apply to students who enrolled in a graduate program before Wednesday and have already received loans for that program.