Alicia Meehan, Campus Carrier deputy news editor
On July 4, 2025, Congress signed the One Big Beautiful Bill Act (OBBBA) into law. The OBBBA is mostly known for its budget changes for the defense department and border enforcement, but also includes changes to federal loan plans for students. According to the IRS website, the OBBBA also impacts federal taxes and credits.
Changes to federal loan programs include the elimination of the Graduate PLUS program, the restrictions added to the Parent PLUS program and a lifetime limit for all federal student loans to a total of $257,500.
Associate Professor of Political Science Eric Sands explained one of the two main components that affect federal student loans. The OBBBA has eliminated a federal program that graduate and professional students could use for tuition, also known as the Graduate PLUS program.
“The Graduate PLUS program which used to cover up to the total cost of admission [has] now been scaled back,” Sands said.
Before the act was passed, graduate and professional level students could withdraw a loan for up to the total cost of admission. The OBBBA put a cap on the amount graduate and professional students could borrow.
Director of Financial Aid Noemi Sarrion said that the changes to the Graduate PLUS program do not affect the large undergraduate population of Berry students. The federal subsidized and unsubsidized loans remain unaffected by the OBBBA. Sarrion said that undergraduates are mostly eligible for the same amounts as before July 2025 when filing the Free Application for Federal Student Aid (FAFSA).
“So [the changes in federal student loans] doesn’t affect us much due to the undergrad population,” Sarrion said.
The changes to the federal Parent PLUS loan, however, affect the undergraduate population. Previously, this loan could account for the total cost of tuition. After the OBBBA, a $20,000 per year cap was placed on the loan.
“If you have a gap in your tuition, and you wanted to cover it with a Parent PLUS loan, the parent of an undergrad student could apply for a loan for the value of that gap and cover the cost,” Sarrion said.
Sands also explained the cap on all federal student loans put in place by the OBBBA. Excluding Parent PLUS loans, students have a lifetime cap of $257,500.
“There’s an overall lifetime cap of $257,500,” Sands said. “You’re talking from college to graduate school, college to law school or college to medical school.”
The reasoning behind the OBBBA’s changes to federal aid, according to Sands, is to limit the amount of debt that students will have going into the workforce.
“[Debt] is a big problem for students that are just entering into the workforce,” Sands said. “They already owe $200,000 [to the government].”
As inflation rises steadily as the years go by, cost of tuition is rising at a sharper level. Student debt has become such a problem in recent years because of a lack of cap on the amount that students can take out for a loan.
According to an article by Melissa Brock on SOFI.com, the cost of tuition for colleges and universities has generally increased at a much quicker rate than overall inflation, rising 180% over the past 20 years.
Sarrion said that depending on the financial circumstances of an undergraduate’s parents, the private lender market can be a good place to find loans to cover any more borrowing.
“While the One Big Beautiful Bill caps the Parents PLUS loan, that doesn’t mean that parents cannot borrow from somewhere else,” Sarrion said. “That could be any lender specializing in educational loans or could be your own credit union or bank if they are offering any type of loan or credit at a competitive rate that makes sense for that family and their financial circumstances.”
The OBBBA provides a process that allows students who have already left college to use an income-based repayment plan. Those with low incomes will be expected to pay their loans back in smaller amounts than those who make more money.
“This [addition to the bill exists] because it’s still trying to find a way of helping students who aren’t in college anymore and are still saddled with all this debt,” Sands said.
Sands said that while the changes to the Graduate PLUS and Parent PLUS loans benefit current and future college students, the introduction of the income-based repayment plan is meant to benefit those who have already graduated.
“Any program needs to take into account any students that didn’t benefit from these changes and things they can do to bring down their debt levels,” Sands said.
According to the studentaid.gov official website, the OBBBA removes the prior requirement of partial financial hardship to enroll in the income-based repayment plan. Previously, financial aid workers would use an equation based on income and family size to determine if the borrower falls at or below the standard payment plan.
Sarrion said that those whose parents had taken out a Parent PLUS loan before the changes were enacted will not be impacted by the changes. Their loan will not be capped. This includes all undergraduate students who are currently enrolled.
“The bill comes with a legacy provision where prior borrowers under the past law still have access to a larger amount [of loan],” Sarrion said.
Sarrion emphasized that despite the changes to federal loans by the OBBBA, undergraduate students still have access to federal aid opportunities as previously provided including federal unsubsidized, subsidized and private loans. The program that gives loans to parents to pay off their undergraduate students’ borrowing is the only undergraduate loan that has been decreased.