The U.S. Department of Education issued a press release explaining changes to the government’s student debt program in accordance with President Donald Trump’s “One Big Beautiful Bill Act” aka OBBBA.
The consensus was reached during a two-week rulemaking hearing in September and November “to set limits and common sense barriers to future student loan borrowing and to simplify the federal student loan repayment system.” added.
The changes will take effect from July 2026.
Donald Trump signed the OBBBA into law in July 2025 with provisions that his administration says will “simplify the overly complex student loan repayment system and reform how students and families borrow in the future.”
Changes in Student Debt Reserves in accordance with the OBBBA
In an official statement, the department said the Committee on Transforming and Improving Student Education (RISE) reached consensus on the entire package of changes related to federal student loans as proposed by the OBBBA.
According to Nicholas Kent, Under Secretary for Education, the changes will “simplify our complex student loan repayment system and better align higher education with the needs of the workforce”.
He added that the move “will help drive a sea change in higher education by holding universities accountable for outcomes and putting significant pressure to reduce tuition costs. This will benefit borrowers who will no longer be pushed into insurmountable debt to fund degrees that don’t pay off.”
Here are the highlights of what loans and schemes have been removed, reduced or updated.
Impact: What should students do?
According to a Newsweek report, as many as 42 million Americans hold $1.7 trillion in student loans.
Alex Beene, a financial literacy instructor at the University of Tennessee at Martin, told Newsweek that students will have to watch the changes “for many years to come.” He also noted that many who have already taken advantage of the remission programs will need to check the status of their connection to the RAP.
“Many of the previous forgiveness programs have been merged into a repayment assistance plan that will offer borrowers additional relief based on their income, but still require a minimum payment each month compared to previous debt relief products that were introduced,” he said.
Beene went on to believe that students will have to rework their loan details under the new rules, and some may opt for more “stable” pathways or different degrees that offer financial security and the ability to repay loans.
