The US Department of Education has finalized sweeping reforms under the One Big Beautiful Bill Act (OBBBA), marking a major milestone in reshaping the nation’s student loan system.
The Reimagining and Improving Student Education (RISE) Committee, following extensive deliberations in September and November, reached consensus on measures to simplify repayment, cap excessive borrowing, and increase accountability among higher education institutions.
The reforms aim to protect borrowers from unmanageable debt and align student loans with realistic workforce outcomes.
The changes represent a significant overhaul of the federal student loan framework, targeting years of complexity and inefficiency.
By streamlining repayment plans, limiting graduate and professional loans, and eliminating programmes that encouraged unsustainable borrowing, the Department seeks to create a more transparent and sustainable model for funding higher education.
Ending graduate borrowing excesses
Central to the reforms is the elimination of the Grad PLUS programme, which has long been criticized for driving high debt levels among graduate students. Parent PLUS loans will now face new borrowing caps, while multiple repayment options will be replaced with a single Repayment Assistance Plan (RAP).
Starting July 2026, graduate students will be limited to $20,500 per year, with a lifetime maximum of $100,000. Professional students will be capped at $50,000 annually and $200,000 overall. The previous system had allowed borrowing up to the full cost of attendance, often leading to debt from expensive programmes with limited returns.
A step toward accountability
Under Secretary of Education Nicholas Kent described the reforms as transformative, stating in a press release: “The consensus language agreed upon by the negotiators will help drive a sea change in higher education by holding universities accountable for outcomes and putting significant downward pressure on the cost of tuition. Borrowers will no longer be pushed into insurmountable debt to finance degrees that do not pay off.”
Negotiated rulemaking: A collaborative approach
The RISE Committee reviewed 17 regulatory provisions, including revisions to the RAP and the definition of a professional student. Based on committee recommendations, the Department refined proposed regulations across multiple areas, reflecting a collaborative policymaking process under Section 492 of the Higher Education Act, which mandates public engagement before formal rulemaking.
Public engagement and next steps
Following the RISE Committee’s formation in July 2025, the Department conducted a virtual public hearing on August 7 to gather feedback on simplifying higher education regulations. With the negotiated rulemaking process concluded, it will now draft a Notice of Proposed Rulemaking (NPRM) for publication in the Federal Register, inviting further public comment.
Implications for students and institutions
The reforms promise greater clarity, fiscal discipline, and protection for borrowers while holding universities accountable for tuition costs and programme outcomes. As implementation moves forward, the OBBBA is set to redefine expectations for both students and institutions, balancing higher education access with long-term financial sustainability.