The U.S. Department of Education announced on Jan. 29 possible changes to student loan repayment plans and reductions to higher education costs. 

The One Big Beautiful Bill Act, which became law in July 2025, eliminated the Graduate PLUS loan program, a federal student loan given to graduate and professional students. The Department of Education wrote in a new release that the program “allowed unlimited borrowing and contributed to rising graduate tuition.” Now, the department is proposing to implement program-specific loan caps for graduate students to avoid overborrowing. 

“For years, American families have rightfully been concerned about the escalating cost of higher education, the long-term — and often negative — effects of student loan debt,” wrote Nicholas Kent, the under secretary of the Department of Education, in the news release. “With consensus reached in support of the Department’s proposed rule, we have a clear path forward to fulfill the President’s promise of making higher education more affordable.”

As part of the proposal, the department also wants to incorporate two repayment plans that build upon the Beautiful Bill Act, which added a second chance for rehabilitation for borrowers with loans in default status. The proposed plans are a new tiered, standard repayment plan and an income-driven one. 

The standard repayment plan would offer fixed terms of either 10, 15, 20 or 25 years, depending on the loan’s size, to give borrowers “more time to repay,” according to the news release. The income-driven plan would give borrowers a repayment plan that aligns with their ability to pay. 

Amy Czulada, senior advisor of outreach and engagement at Protect Borrowers, said the proposed rule could possibly do more harm than good.

“It’s either going to drive people into not going back to school for the education they want to receive, or it’s going to push people into the private loan market, and they have much riskier, higher interest rates and fewer protections than federal loans do,” Czulada said. 

The department is accepting public comments through the Federal eRulemaking Portal until March 2, and will finalize the rule after processing the feedback, according to the news release. 

Czulada said people should submit feedback to let the department know how education costs impact borrowing and repayment plans for students. 

“Things were already pretty bad for student loan borrowers, and this is only going to make things worse,” Czulada said.