Major Student Loan Limits Set To Take Effect, With Big Implications For Borrowing

ByAdam S. Minsky,

Senior Contributor.

The Department of Education is forging ahead with significant changes to the federal student loan system that will limit the ability of prospective students enrolling in college and graduate programs to finance their degree. Advocacy groups warned that the new limitations, which will take effect starting next year, may force many Americans to turn to riskier private student loans or abandon higher education entirely.

The new student loan limits stem from provisions of the One Big, Beautiful Bill Act, or OBBBA. The Department of Education completed negotiated rulemaking earlier this month to enact new regulations under the OBBBA governing the disbursements of federal student loans for borrowers who complete the FAFSA, or Free Application for Federal Student Aid. Under the new rules, entire loan programs will be eliminated or capped, and prospective students and their families will have more limited borrowing options. The changes are set to take effect starting on July 1, 2026.

Here’s a breakdown of the new student loan limits, and what it means for college and graduate school students.