New Education Department rules aim to curb borrowing, simplify repayment, and pressure universities to lower prices.
By yourNEWS Media Newsroom
The U.S. Department of Education announced Thursday a series of policy changes targeting graduate student lending, including the elimination of a federal loan program that allowed borrowers to take on unlimited debt.
Under the new rules outlined in an official press release, the department will phase out the Grad PLUS loan program, which has historically enabled graduate students to borrow without a cap to cover tuition and related expenses.
The department said the change is intended to help control rising education costs and reduce excessive borrowing. In addition to ending the program, officials will introduce new borrowing limits for graduate students and expand income-based repayment options.
Nicholas Kent, Under Secretary of Education, said the policy reflects a broader effort by the administration to address long-standing issues in higher education financing.
“The Trump Administration is focused on putting students and taxpayers first, which is why we are implementing durable policies to make higher education more affordable,” Kent said. He added that the reforms are designed to tackle “exorbitant tuition costs, unchecked borrowing, and a confusing maze of repayment options that too often leave borrowers with higher balances despite making payments.”
Kent said the new framework aims to reduce the risk of excessive debt while encouraging institutions to control tuition increases. “This final rule will help ensure students can access higher education without racking up excessive loan debt, offer repayment options that better serve borrowers, and force institutions to reduce costs,” he said.
The department pointed to long-term trends in tuition growth, citing data from J.P. Morgan showing that college costs have risen more than 900% since the 1980s.
Officials argued that the availability of unlimited federal loans has contributed to those increases. Kent said that reducing access to uncapped borrowing would apply pressure on colleges and universities to limit price increases. “When there is more money in the system, institutions of higher education are going to raise their prices,” he said.
The changes are scheduled to take effect in July.
The announcement follows earlier action by the department in 2025 to resume collections on defaulted student loans after a multi-year pause. According to department figures, a majority of borrowers are currently behind on payments, with millions in advanced stages of delinquency.
The new rules mark a shift in federal student loan policy, focusing on limiting borrowing and restructuring repayment as part of a broader effort to address rising education costs.
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