Student Loan Borrowers: How will new federal laws affect me?

Do you need expert guidance on your student loan? Submit your questions to our Student Loan Ombudsperson, Celina Damian. She addresses your inquiries and answers some of them here. Visit our Student Loans page to contact Celina.

As we end 2025, there are important updates and deadlines for borrowers. The One Big Beautiful Bill (OBBB), signed into law on July 4, 2025, made significant changes to the student loan system, including:

• Repayment Assistance Plan (RAP): The OBBB created a new Income-Driven Repayment (IDR) plan known as RAP. It will replace current IDR plans and will be the only income-based plan available for new borrowers or those with loans disbursed on or after July 1, 2026. Current borrowers will continue to have access to Income-Based Repayment (IBR) as well as the new RAP plan.
• Parent Plus Program: Parent Plus borrowers will not be eligible for the new RAP plan, which means they will no longer qualify for the Public Service Loan Forgiveness (PSLF) Program. Current Parent Plus borrowers who have not applied for PSLF, but are eligible, must consolidate into a Direct Consolidation Loan and enroll in an IBR plan before June 30, 2026. Parent Plus borrowers are advised to consolidate as soon as possible to ensure they meet the deadline. Also, effective July 1, 2026, Parent Plus loans will have new limits of $20,000 per year, with a lifetime limit of $65,000 per student. The OBBB establishes a $257,500 lifetime borrowing limit starting July 1, 2026.
• Direct Graduate Plus Program: Under the OBBA, this program will be eliminated effective July 1, 2026. Graduate and professional students (those in Law, Medicine, etc.) will no longer be able to borrow up to the full cost of attendance. Graduate students will be limited to $20,500 per year or $100,000 total. Professional Students will be capped at $50,000 per year or $200,000 total. ED has made determinations on what is considered a “graduate” and “professional” program, which may affect a borrower’s ability to borrow for certain programs.
• Term Repayment Plans: The Standard, Graduated, and Extended term repayment plans will be consolidated into one New Standard Tiered Repayment Plan. The new plan will have term repayment from 10 to 30 years and will be available to all borrowers.
• Saving for a Valuable Education (SAVE) Plan: On December 9, 2025, ED announced a proposed settlement agreement that would end SAVE. The settlement is still pending court approval. If you are a borrower who remains on SAVE forbearance, expect to be moved into another IDR plan sometime in 2026. Borrowers on SAVE forbearance started accruing interest on August 1, 2025. Borrowers should check their accounts to ensure that interest is being applied correctly. A borrower may make interest-only payments during SAVE forbearance.
• Public Service Loan Forgiveness (PSLF) Program: If you are a borrower on the PSLF track, continue certifying your employment. Use the PSLF Buyback program if you already have 120 eligible months of qualifying employment, and buying back months in forbearance or deferment would result in forgiveness.

Student loan borrowers with questions should contact the DFPI at [email protected]. There are also free resources at the Student Loan Empowerment Network. Counselors are available to help you understand your options, forgiveness eligibility, and more. Call them at 888-774-2227 or fill out this form.