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The Department intends to propose regulations after completing negotiated rulemaking, to implement the changes made to student loans in the One Big Beautiful Bill. This includes phasing out graduate and professional PLUS Loans; eliminating income contingent repayment (ICR), Pay As You Earn (PAYE), setting loan limits for $20,000 for graduate students and $50,000 for professional students and creating a new loan repayment plan known at the Repayment Assistance Plan.”

Overall Description of Deadline: Many provisions are subject to Public Law 119-21 and are effective upon enactment, on July 1, 2026, on July 1, 2027, or on July 1, 2028.

Statement of Need:

This rule implements the provisions of the Working Families Tax Cuts Act, codified at Public Law 119-21, including phasing out graduate and professional PLUS Loans, eliminating income contingent repayment (ICR) and Pay As You Earn (PAYE), setting loan limits for $20,000 for graduate students and $50,000 for professional students, and creating a new loan repayment plan known at the Repayment Assistance Plan.

Summary of the Legal Basis:

The Department is conducting this rulemaking pursuant to Public Law 119-21 (the Working Families Tax Cuts Act) and title IV of the Higher Education Act of 1965, as amended, codified at 20 U.S.C. 1070.

Alternatives:

Most of these final regulations implement statutory provisions of the Working Families Tax Cuts Act where the Department does not have discretion. The Department exercised discretion in two areas under the Working Families Tax Cuts where the alternatives considered, discussed in the final rule, have significant impact:
(1) Whether payments in the Repayment Assistance Plan for married borrowers who each have student debt are calculated on each spouse's respective income or on their combined income; and
(2) Defining a professional student, which allows certain degree programs to access higher annual and aggregate loan limits than a graduate program.

Anticipated Costs and Benefits:

The final regulations change many provisions related to the terms and benefits available to borrowers in the Federal student loan program, resulting in both costs and benefits for students, borrowers, institutions, private companies, and taxpayers. The provisions in the final regulations that produce significant costs or benefits include new annual and aggregate loan limits for graduate and professional students, as well as parents who borrow under the Parent PLUS Program. These anticipated costs and benefits are discussed in the final rule.

Risks:

Risks are discussed in the final rule.