Department of Education Finalizes Student-Loan Repayment Overhaul with New Caps and Plans
The Department of Education under President Trump's administration has announced the final rule for a comprehensive overhaul of the student-loan repayment system. This new rule, set to take effect on July 1, introduces significant changes including new borrowing caps and repayment plans. Key provisions include the elimination of the Grad PLUS program, the introduction of loan limits for graduate and professional students, and the creation of two new repayment plans. The Department has set a $100,000 lifetime borrowing cap for graduate students and a $200,000 cap for professional students, narrowing the definition of 'professional' to 11 specific programs such as law, medicine, and dentistry. Additionally, Parent PLUS loans will now have a cap of $20,000 annually. The overhaul also introduces a new Repayment Assistance Plan (RAP), which replaces existing income-driven repayment plans and sets a minimum monthly payment of $10, potentially increasing monthly payments for borrowers.