\n<\/p>\n
President Donald Trump<\/a>‘s massive\u00a0tax and spending package<\/a> will bring sweeping changes to federal student loans<\/a>, in part by capping how much money people can borrow from the federal government to pay for college and graduate school.<\/p>\n Among other measures, the legislation, which Trump has called the “one big, beautiful bill,” <\/strong>sets\u00a0new limits<\/a>\u00a0for students and their families. The following changes go into effect for new borrowers on July 1, 2026:<\/p>\n These new limitations “will reshape how students borrow,” said Lesley Turner, an associate professor at the University of Chicago Harris School of Public Policy and a research fellow of the National Bureau of Economic Research.\u00a0<\/p>\n “Students are either going to borrow less or make up the difference with private loans, or they will not start or complete a graduate program,” Turner said.<\/p>\n More from Personal Finance:<\/strong> Aspiring lawyers, doctors\u00a0and dentists are most likely to be impacted by the new loan limits, Turner said. “It’s quite a substantial cut in the loans students have access to.”<\/p>\n Roughly 9.3% of law students, 27.5% of medical school students and 60% of those in dentistry programs graduated with more debt in 2020 than is allowed under the new loan limits, according to calculations by higher education expert\u00a0Mark\u00a0Kantrowitz.<\/p>\n<\/div>\n Halfpoint Images | Moment | Getty Images<\/p>\n<\/div>\n<\/div>\n<\/div>\n In fact, the average cost of medical school already exceeds $200,000. At private institutions, the average cost is closer to $300,000<\/a>. \u00a0<\/p>\n The new student loan caps\u00a0“will affect many prospective medical and other health professions students and worsen the nation’s persistent doctor shortage,” David Skorton, president and CEO of the Association of American Medical Colleges, said in a statement<\/a>.\u00a0\u00a0<\/p>\n<\/div>\n Other experts say the new loan limits may provide a much-needed check on soaring tuition costs, which have jumped significantly<\/a> in recent decades \u2014 outpacing inflation and other household expenses \u2014 leaving some students feeling priced out of higher education.<\/p>\n Nearly every year,\u00a0students and their families borrow more to cover the rising cost of attendance, a trend that has led to a ballooning of total outstanding student debt to more than $1.7 trillion.<\/p>\n With new limits on how much people can borrow, high-priced schools might have to lower tuition or increase aid, Turner said.<\/p>\n<\/div>\n The limits on federal student loans are likely to spur students to find other lenders to bridge the gap.<\/p>\n “The new loan limits for Parent PLUS loans and graduate\/professional school loans will shift some borrowing from federal loans to private student loans,” Kantrowitz said. “This will particularly impact low-income students, who are less likely to qualify for private student loans.”<\/p>\n Unlike federal loans, private student loan lenders rely on credit scores<\/a> for the borrower \u2014 which could be the student, a parent or even another relative or friend as a cosigner \u2014 to determine eligibility and interest rate<\/a>.\u00a0“Access is by no means guaranteed,” Turner said.<\/p>\n<\/div>\n As it stands, roughly 90% of student loans come from the federal government, and the remaining 10% are private student loans, according to\u00a0the\u00a0College Board<\/a>.\u00a0<\/p>\n Students often turn to private student loans once they have reached the federal student loan limits and still need additional education financing.<\/p>\n Already, private student loan volume is up significantly. Private student loan originations during the 2024-25 academic year jumped 8.63% from a year earlier, according to\u00a0Enterval Analytics, a student loan data analysis firm.<\/p>\n Private loans can also come with fewer safety nets and less flexible repayment options compared to federal loans.<\/p>\n Subscribe to CNBC on YouTube.<\/strong><\/em><\/a><\/p>\n<\/div>\n<\/div>\n\n\n
\n
\n
\n
Trump’s ‘big beautiful bill’ slashes CFPB funding<\/a>
78% say Trump’s tariffs will make it harder to deal with debt<\/a>
Tax changes under Trump’s ‘big beautiful bill’ \u2014 in one chart<\/a><\/p>\nPrivate student loans likely to fill the gap<\/h2>\n
Source link <\/a><\/p>\n","protected":false},"excerpt":{"rendered":"President Donald Trump‘s massive\u00a0tax and spending package will bring sweeping changes to federal student loans, in part by…\n","protected":false},"author":3,"featured_media":34373,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[11],"tags":[],"class_list":["post-34372","post","type-post","status-publish","format-standard","has-post-thumbnail","category-investing","cs-entry","cs-video-wrap"],"_links":{"self":[{"href":"https:\/\/financialrush.com\/index.php?rest_route=\/wp\/v2\/posts\/34372","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/financialrush.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/financialrush.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/financialrush.com\/index.php?rest_route=\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/financialrush.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=34372"}],"version-history":[{"count":0,"href":"https:\/\/financialrush.com\/index.php?rest_route=\/wp\/v2\/posts\/34372\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/financialrush.com\/index.php?rest_route=\/wp\/v2\/media\/34373"}],"wp:attachment":[{"href":"https:\/\/financialrush.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=34372"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/financialrush.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=34372"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/financialrush.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=34372"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}