Budget Reconciliation Summary Grad PLUS: Eliminates the Grad PLUS Loan Program. Annual Cap: Limits the amount of federal student aid a student can receive annually: ● Graduate student – $20,500 ● Professional student – $50,000 Graduate Lending
Aggregate Cap: Limits the amount of federal student aid a student can receive in the aggregate: ● Graduate student – $100,000 ● Professional student – $200,000 Lifetime Cap: Caps the lifetime amount students can borrow at $257,500 ( $200,000 combined for graduate/professional education, plus $57,500 for undergraduate education). Changes the Standard Repayment timeline: ● 10 years for debt amounts less than $25,000 ● 15 years for $25,000 –$49,999 ● 20 years for $50,000 –$99,999 ● 25 years for $100,000 or more Eliminates all repayment plans authorized under Income-Contingent Repayment (ICR) regulations, as well as extended and graduated plans for new loans disbursed on or after July 1, 2026. For borrowers with existing loans disbursed prior to enactment of the bill, transitions those who are in an ICR Plan or an administrative forbearance to an existing Income-Based Repayment Plan (IBR) or the new Repayment Assistance Plan. The transition will take place no later than July 1, 2028.
Loan Repayment
Creates new Repayment Assistance Plan for loans disbursed on or after July 1, 2026, which bases monthly payments on Adjusted Gross Income (AGI): Income
Monthly Payment
Income
Monthly Payment
$10,000 or less
$10
Between $60,001 – $70,000
6% of AGI
Between $10,001 – $20,000
1% of AGI
Between $70,001 – $80,000
7% of AGI
Between $20,001 – $30,000
2% of AGI
Between $80,001 – $90,000
8% of AGI
Between $30,001 – $40,000
3% of AGI
Between $90,001 – $100,000
9% of AGI
Between $40,001 – $50,000
4% of AGI
Over $100,000
10% of AGI
Between $50,001 – $60,000
5% of AGI
● Provides student loan forgiveness after 360 qualif ying monthly ● payments (30 years). ● Waives any unpaid monthly interest.
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