What's happened
On July 4, 2025, President Trump signed a significant spending bill that overhauls student loan borrowing and repayment options. The legislation eliminates the Grad PLUS loan program, caps borrowing limits for graduate and professional students, and introduces new repayment plans, raising concerns about access to higher education and potential impacts on healthcare and legal professions.
What's behind the headline?
Key Implications of the Spending Bill
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Borrowing Limits: The elimination of the Grad PLUS loan program restricts graduate students to borrowing $20,500 annually and $100,000 over their lifetime, while professional students can borrow up to $50,000 annually and $200,000 total. This is significantly lower than the costs of many graduate programs, particularly in medicine and law.
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Impact on Healthcare: Experts warn that these changes could worsen physician shortages, especially in underserved areas. The Association of American Medical Colleges has highlighted that many students may not be able to afford medical school under the new caps, potentially leading to fewer healthcare providers.
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Repayment Plans: The new repayment options are less favorable than previous income-driven plans, with payments set at 1-10% of income and forgiveness after 30 years. This could lead to higher monthly payments for many borrowers, particularly those who previously benefited from more generous plans.
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Long-term Consequences: The bill's restrictions may deter students from pursuing advanced degrees, particularly those from low-income backgrounds. This could have lasting effects on the workforce in critical sectors, as fewer graduates may enter fields like medicine and law, which are already facing shortages.
Overall, the legislation reflects a significant shift in federal student loan policy, prioritizing cost control over accessibility, which may have profound implications for future generations of students.
What the papers say
According to Ayelet Sheffey in Business Insider UK, the new law caps borrowing for graduate students significantly, stating, "the bill eliminates the Grad PLUS loan program, which allowed graduate and professional students to borrow up to the full cost of attendance for their programs." This sentiment is echoed by Eric Berger in The Guardian, who notes that the changes could limit access to education for marginalized communities, raising concerns about the future workforce in high-demand fields. Critics like Sen. Elizabeth Warren have voiced strong opposition, arguing that the bill will increase financial burdens on borrowers, while supporters claim it will help control rising tuition costs. The Independent highlights that the bill could lead to increased monthly payments for borrowers, potentially causing financial strain. Overall, the coverage illustrates a divide between those who see the reforms as necessary fiscal responsibility and those who view them as detrimental to educational access.
How we got here
The spending bill, passed by Congress on July 3, 2025, is part of a broader effort to reform student loan policies amid ongoing debates about rising education costs and access to advanced degrees. Critics argue that the changes disproportionately affect marginalized communities and exacerbate existing shortages in critical fields like healthcare.
Go deeper
- What are the new borrowing limits for students?
- How will this affect healthcare professionals?
- What do critics say about the spending bill?
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What Are the New Student Loan Repayment Options in 2025?
On July 3, 2025, Congress passed a significant spending bill that alters student loan repayment options, raising many questions about its implications. With the elimination of income-driven repayment plans and new restrictions, borrowers are left wondering how these changes will affect their financial future. Below, we explore the most pressing questions surrounding this legislation.
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