UPDATE: The U.S. Department of Education is forging ahead with major changes to student-loan repayment plans despite the ongoing government shutdown, confirming that negotiations will continue into their second week. This critical overhaul, part of President Donald Trump’s educational reforms, aims to introduce new borrowing caps and repayment structures that could impact millions of students.
On Monday, the Department of Education will resume discussions on Trump’s student-loan repayment plan, which was formalized in the “One Big Beautiful Bill Act” signed into law in July. Key topics include the elimination of the Grad PLUS program and the introduction of stringent borrowing limits for graduate and professional students. The negotiations are essential, as the department plans to implement these changes by July 1, 2026.
Despite the shutdown halting many government activities, officials assert that the rulemaking process will proceed uninterrupted. Jeff Andrade, deputy assistant secretary for policy, emphasized the importance of these negotiations, stating,
“Failure to actively continue work towards promulgating these regulatory changes would substantially impair otherwise funded programs, like Pell Grants and direct loans.”
The proposed changes include new borrowing caps of $20,500 per year and $100,000 over a lifetime for graduate students, while professional students would face limits of $50,000 per year and $200,000 lifetime. Critics, including Bennett Boggs from the Missouri Department of Higher Education, have raised concerns that these caps could hinder access to crucial graduate programs, potentially forcing students to seek private loans to cover costs.
The first negotiation session highlighted significant objections to the limited list of qualifying advanced degree programs, which currently excludes several fields vital for economic growth. Stakeholders worry that restricting access may cripple workforce development efforts in key sectors.
In addition to the borrowing caps, the Department of Education plans to replace existing income-driven repayment plans with two new options: a standard repayment plan and a Repayment Assistance Plan, which would allow borrowers to have remaining balances forgiven after 30 years.
As negotiations progress this week, the public will have opportunities to comment before final decisions are made. However, due to the shutdown, updates and proposed texts from the department will not be available online until normal operations resume.
These developments are critical for current and prospective students, as the outcomes of the negotiations will shape the financial landscape of higher education for years to come. Keep an eye on this evolving story as more information becomes available.
