The average cost of college tuition and fees at public institutions has risen about 141% over the last 20 years. Right now, nearly 43 million people have federal student loan debt, according to the U.S. government.
And big changes are coming to how students and parents will borrow federal money to help pay for college.
Under President Donald Trump’s “Big, Beautiful Bill,” recently signed into law, there will be limits on borrowing for federal student loans and a reduction in the number of repayment options you can choose.
“You’re not going to be able to borrow as much as you could in the past,” explained Michelle Singletary, a personal finance columnist at the Washington Post.
Under the Parent Plus Program, parents will be able to borrow only $20,000 per year or $65,000 total per undergraduate student in federal loans.
“I’ve dealt with a lot of students and parents who have borrowed way too much for college,” Singletary said.
Under the Repayment Assistance Plan, borrowers who take out loans after July 1, 2026, will be allowed to pay based on income.
“There is sort of a new standard payment which will give some people longer to pay the loans, which means their monthly payments will be lower, but you’re going to pay more in interest,” Singletary said.
Borrowers whose federal student loan interest payments were halted under the Biden administration will now have to pay that interest beginning Aug. 1.
“That break is ending, so you need to get in contact with your loan servicer as soon as possible so you know how much you have to pay going forward,” Singletary said.
There are other ways to get financial help besides federal loans. Some of those options include scholarships, grants and work-study jobs.