*Erika Meadows
I. Introduction
A third-year medical student at the University of Wisconsin, Kylie Ruprecht, relies on both Unsubsidized and Graduate Plus loans to cover her educational expenses.[1] On July 1, 2026, a provision in the Big Beautiful Bill Act of 2025 will take effect, establishing new borrowing limits and modifying repayment plans, thus affecting many students pursuing higher education.[2] While Kylie Ruprecht’s current loans would not be entirely affected, her current debt load would surpass the new borrowing limits.[3] This will be the reality for many student loan borrowers, severely impacting low-income students. The new borrowing limits will force the transition into private loans that are not low-income student-friendly, removing their chance to pursue higher education.[4]
II. The One Big Beautiful Bill Act of 2025’s Implications on Student Loan Borrowers
On July 1, 2026, the One Big Beautiful Bill Act will take effect, capping the amount of federal student loans borrowers can take out and changing repayment plans.[5] Parents of undergraduate students who need to cover educational expenses not covered by other forms of financial aid utilize Parent Plus Loans.[6] However, the new Bill will cap the loan at $20,000 per year with a lifetime cap of $65,000.[7] Graduate Plus loans, available to graduate and professional students to cover educational expenses, will be terminated by the Big Beautiful Bill for new borrowers.[8] However, graduate and professional students who have already borrowed from the Graduate Plus program before the Big Beautiful Bills new loan caps take effect will luckily retain access to their loans.[9] Direct Unsubsidized loans will become the only option graduate and professional students have when Graduate Plus Loans are eliminated.[10]
Once the One Big Beautiful Bill has taken effect, current repayment plans will be consolidated into two options:[11] a Standard Plan and a Repayment Assistant Plan (RAP).[12] Under the Standard Plan, borrowers will have a fixed repayment schedule based on their total amount of debt.[13] Borrowers with less than $25,000 in total debt will be enrolled in a ten-year repayment, plan, while those with more than $100,000 will be enrolled in a twenty-five-year plan.[14] The RAP is a new, income-driven repayment plan consisting of monthly payments based on the borrower’s income and family size.[15] The RAP plan requires borrowers to make a minimum payment of $10 per month, even if they fall below the federal poverty line.[16]
III. The Future of Higher Education for Low-Income Students Will Diminish
The new limits posed in the One Big Beautiful Bill will significantly make it harder for low and middle-income graduate students to attend graduate programs.[17] Many students pursuing higher education will be impacted, as Graduate Plus loans will be eliminated, and caps will be set on Direct Unsubsidized and Parent Plus loans.[18] As tuition costs and living expenses continue to soar nationwide, students will be forced to bear the burden of the new borrowing limits if they wish to continue pursuing higher education.[19] For instance, “[t]he average cost of medical school already exceeds $200,000. At private institutions, the average cost is more than $300,000.”[20] “Just under 20% of master’s students borrow above the proposed limits.”[21]
The changes also affect repayment plan options for Parent Plus borrowers if they do not act quickly.[22] Parent Plus borrowers who consolidate their loans before July 1, 2026, and enroll in an Income Driven Repayment (IDR) plan before July 1, 2028, will still be eligible for an IDR and an Income Based Repayment (IBR) plan.[23] However, they will not be eligible for RAP, and any Parent Plus borrowers who have not consolidated their loans will not be eligible for IDR.[24] In turn, Parent Plus borrowers will have difficulty keeping up with their loan payments if they struggle to pay a fixed amount.[25] Parent Plus loan borrowers who have not consolidated their loans or who take on new loans after July 1, 2026, takes effect will only qualify for the new Standard Repayment plan.[26]
IV. Many Will be Forced to Turn to Private Loans
The new capped limits on federal student loans will force borrowers to turn to private loans to cover leftover costs.[27] Private loans differ from federal loans because “[p]rivate loan lenders rely on a borrower’s credit score to determine eligibility and interest rate.”[28] Private loan borrowers also experience “fewer safety nets and less flexible repayment options compared with federal loans.”[29] Since private loans lack income-driven repayment and forgiveness, borrowers will struggle to repay their loans, be burdened by debt longer, or be denied entirely.[30] To qualify for a private student loan, generally, borrowers need a minimum credit score of 670.[31] Low-income borrowers have an average credit score of 658, while high-income borrowers have an average score of 774.[32] Therefore, low-income borrowers on average will not have a credit score high enough to qualify for a private loan, or will be provided one with an extremely high interest rate.[33] Generally, students who cannot qualify for loans themselves may turn to cosigners for assistance.[34] For cosigners to be approved, they must demonstrate that they have a minimum credit score of 670, reliable income, and a low debt-to-income ratio.[35] Therefore, parents who do not meet these requirements will more than likely be unable to assist their children with student loans.[36] Student borrowers who have hit their limits on federal loans or cannot go the private route may be forced to use their credit cards to pay for the uncovered expenses.[37]
Federal student loans are critical for many students to pursue higher education. Basing access to higher education on credit scores “makes higher education even more exclusive, discouraging young people from aiming high and discouraging working adults from retooling their skill sets.”[38]
V. Conclusion
Undergraduate and Graduate school tuition and costs of attendance have steadily increased across the nation, and for many Americans, higher education is out of reach.[39] The One Big Beautiful Bill could discourage people from attending college or graduate school, as it can increase the amount of student loan debt that students in America face and make higher education increasingly out of reach for low and middle-income Americans.[40]
*Erika is a second-year evening student at the University of Baltimore School of law. She serves as a Staff Editor for the school’s Law Review, a Teaching Assistant for Introduction to Lawyering Skills, and as an intern for The Honorable Myshala Middleton for the Circuit Court of Baltimore City. Before law school, she received her Bachelors of Arts in Criminal Justice at Radford University.
[1] Jessica Dickler, New Federal Student Loan Limits are a ‘Punch in the Face’ for Aspiring Doctors: American Medical Association President, CNBC (Aug. 7, 2025, at 6:15 ET), https://www.cnbc.com/2025/08/07/trumps-big-beautiful-bill-sets-student-loan-caps-for-medical-school.html.
[2] Id. (discussing One Big Beautiful Bill Act, Pub. L. No. 119-21, 139 Stat. 72 (2025)).
[3] Id.
[4] See discussion infra Parts III–IV.
[5] Big Bill Means Big Changes for Student Loan Borrowers: What You Need to Know, Nat’l Consumer L. Ctr.: Student Loan Borrower Assistance (July 15, 2025), https://studentloanborrowerassistance.org/big-bill-means-big-changes-for-student-loan-borrowers-what-you-need-to-know/.
[6] Id.
[7] Id.
[8] Id.
[9] Id.
[10] Zoe Kolenvosky, Explainer: How Student Loans are Changing Under the ‘One Big Beautiful Bill’, The Chronicle Chronquiry (Aug. 6, 2025, at 12:18 ET), https://dukechronicle.com/article/duke-university-federal-changes-to-student-loans-big-beautiful-bill-repayment-pell-grants-20250806.
[11] Cory Turner, What Borrowers Should Know About Student Loan Changes in the One Big Beautiful Bill, NPR (July 24, 2025, at 5:00 ET), https://www.npr.org/2025/07/24/nx-s1-5477646/student-loan-repayment-forgiveness-trump.
[12] Kolenvosky, supra note 10.
[13] Id.
[14] Id.
[15] Id.
[16] Consumer L. Ctr., supra note 5.
[17] Turner, supra note 11.
[18] Peter Granville, The FICO Factor: GOP Megabill Will Limit Who Gets to Access College, The Century Found. (July 21, 2025), https://tcf.org/content/report/the-fico-factor-gop-megabill-will-limit-who-gets-to-access-college/.
[19] Id.
[20] Dickler, supra note 1.
[21] Turner, supra note 11.
[22] Consumer L. Ctr., supra note 5.
[23] Id.
[24] Id.
[25] Id.
[26] Id.
[27] Dickler, supra note 1.
[28] Id.
[29] Id.
[30] Granville, supra note 17.
[31] Emily Guy Birken, What Credit Score Do You Need for a Student Loan in 2025?, Credible (July 22, 2025), https://www.credible.com/student-loans/credit-score.
[32] Tony Azzara, Average Credit Scores by Age, State, and Income, Am. Express: Credit Intel (Oct. 31, 2024), https://www.americanexpress.com/en-us/credit-cards/credit-intel/credit-score-by-age-state/.
[33] Erik Martin, Here’s What You Need to Qualify for a Private Student Loan, U.S. News (Aug. 21, 2025), https://money.usnews.com/loans/student-loans/articles/heres-what-you-need-to-qualify-for-a-private-student-loan.
[34] Guy Birken, supra note 30.
[35] Id.
[36] Mark Kantrowitz, How Will a Parent’s Financial Troubles Affect the Student’s Eligibility for Student Loans?, Fastweb (May 7, 2012), https://www.fastweb.com/financial-aid/articles/how-will-a-parent-s-financial-troubles-affect-the-student-s-eligibility-for-student-loans.
[37] Granville, supra note 18.
[38] Id.
[39] Dickler, supra note 1.
[40] Id.
University of Baltimore Law Review 