New student loan bill: What it means for borrowers

New student loan bill: A new plan to change how Americans pay for college is moving through Congress, and it could bring some of the biggest changes in years. The Senate Republicans shared their version of President Donald Trump’s education ideas as part of a much larger tax and spending bill called the “One Big Beautiful Bill Act.” It’s 71 pages long and includes a lot of changes to federal student loans and how people repay them.

This new Senate version, introduced on June 10, follows Trump’s push to cut down government spending. While it’s not as harsh as the House version passed earlier this year, it still includes some strong ideas. These include new limits on how much students and parents can borrow and a big change to how loan payments work. Experts say this could change how students and families deal with college money now and in the future.

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Loan Limits and New Payment Plans

One of the biggest changes is about how people repay their loans. Right now, borrowers can pick from a bunch of income-driven repayment plans like PAYE, ICR, and Biden’s SAVE plan, which is currently paused. But under the new bill, those plans would go away. Instead, there would be only two choices. One would make borrowers pay the same amount each month based on their original loan for 10 to 25 years.

The other would base payments on income, from 1% to 10%, with a $10 minimum, and loans would be forgiven after 30 years. No interest would build up during that time.

Some people worry that this would hurt protections for borrowers. One expert said she was glad that the worst parts of the House bill weren’t in the Senate version but still had big concerns. Another part of the bill would limit how much money students and parents can borrow.

Right now students can take out Graduate PLUS loans to cover full costs, but this bill would remove that option. Instead, graduate students could only borrow $20,500 a year, or up to $50,000 for professional degrees. Parents could only borrow $20,000 per student each year. Many families might end up turning to private lenders, who usually charge more and offer fewer protections.

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Changes to Pell Grants

The Senate bill also talks about Pell Grants. It doesn’t go as far as the House version, but it still includes some changes. It would stop students with higher incomes from getting Pell money, but it would allow the grants to go to nontraditional programs that aren’t fully accredited. Some experts think this could hurt the Pell program in the long run. One said that while the Senate avoided cutting Pell too much, the changes still put the program’s future at risk.

The bill also tries to make colleges more responsible. Instead of punishing them for unpaid loans, it wants to stop federal aid for programs where graduates don’t earn more than someone with just a high school diploma. This rule has a lot of support, but it might not make it into the final bill due to Senate rules. One education expert said it makes sense, because no one wants to take out loans only to earn less than a high school graduate.