Trump’s Education Department Begins Negotiations on Student Loan Changes

WASHINGTON, D.C. — The U.S. Department of Education, under President Donald Trump, has initiated negotiations regarding major changes to the student loan system. This process began on Monday, focusing on new borrowing caps and repayment options.

The proposed changes are part of Trump’s comprehensive spending legislation. The Department of Education is required to engage in negotiating rulemaking, which allows for stakeholder input and public comment before finalizing any plans. The administration aims to meet a deadline of July 2026 to implement these changes.

The draft proposal highlights key topics for discussion, including new loan limits and adjustments to income-driven repayment plans. A significant focus of the negotiations will be on establishing two new repayment plans intended for rollout next summer. The first will be a standard repayment plan, calculated based on a borrower’s federal loan amounts and interest rates.

The second option is the Repayment Assistance Plan. This plan adjusts monthly payments to 1% to 10% of a borrower’s discretionary income, with a minimum monthly payment of $10. It also waives unpaid interest and provides for loan forgiveness after 30 years.

The Department plans to implement these changes by July 1, 2026. According to the proposal, borrowers who took out loans before this date will still have access to existing repayment plans, while those borrowing after the date will be eligible for the new Repayment Assistance Plan. Additionally, the Grad PLUS loan program may be eliminated after July 1, 2026, which currently allows graduate and professional students to borrow fully for their education.

Under the new rules, borrowing limits will range from $20,500 per year and $100,000 over a lifetime for graduate students, to $50,000 per year and $200,000 for professional students. The draft proposal also seeks to clarify definitions of professional degrees, including fields like pharmacy and veterinary medicine.

However, some professional degrees may not benefit from higher borrowing caps as programs outside of medical fields were not mentioned. Additionally, as reported by Business Insider, numerous professional programs cost over $200,000.

The Department also plans to end deferments for economic hardship and unemployment for federal loans issued after July 1, 2027. New options will be available for borrowers in default, allowing them to rehabilitate loans by making nine consecutive payments within 20 days over ten months. Starting July 1, 2027, borrowers will be able to rehabilitate their loans twice.