How the OBBB Student Loan Changes Could Impact Your Financial Future

If you’ve been hearing about the new “One Big Beautiful Bill Act” (OBBB) and wondering how it will affect your student loans, you’re not alone. 

Officially called the 2025 Reconciliation Legislation (HR1), this sweeping law was signed on July 4th and is nearly 900 pages long. While there’s plenty packed into it, some of the most significant changes affect how students and graduates borrow and repay loans for decades to come.

As Christian women seeking financial clarity and alignment with our values, understanding these changes now can help you prepare with wisdom and faith. Here’s what you need to know.

Student Loans Aren’t What They Used to Be

In the past, many borrowers navigated repayment with options like deferment, forbearance, consolidation, and income-driven plans. For some, loans could be paid off in 7–10 years; others relied on forgiveness programs after 15–25 years of payments.

But today’s landscape is different. 

Tuition costs have skyrocketed, leaving many borrowers with five and six-figure loan balances. Stories of people paying for 15 years only to still owe their original amount aren’t uncommon, largely due to interest accrual.

The OBBB seeks to restructure this system, but not all changes will feel positive.

Key OBBB Student Loan Changes

Here are some of the biggest shifts coming under the new law:

• Lifetime Borrowing Caps: A new $257,500 lifetime cap on federal loans will apply to most borrowers. Graduate students will be limited to borrowing $20,500 per year; professional students (like those pursuing medicine or law) are capped at $50,000 annually. Parent PLUS loans also face new caps at $20,000 per year, with a $65,000 lifetime maximum per student.

• End of Graduate PLUS Loans: By 2026, the Grad PLUS program will be eliminated. Many graduate and professional students may need to rely on private loans, which typically come with higher interest rates.

• Repayment Plan Changes: Some old income-driven plans will be phased out by 2028. A new Repayment Assistance Plan (RAP) will become the default for many borrowers. Unlike current plans that base payments on discretionary income and protect a portion of your earnings, RAP bases payments on gross income, even for borrowers earning below the poverty line.

For example:

• A single borrower earning $45,000 would pay about $41/month under the current SAVE plan. Under RAP, that jumps to $150/month.

• A family of four earning $81,000 could see their payment increase from $36/month to $440/month.

These shifts could lead to more borrowers defaulting unless they prepare strategically.

Longer Forgiveness Timelines: Previously, loan forgiveness could be achieved after 15–25 years of qualifying payments. Under OBBB, forgiveness now kicks in only after 30 years. That’s essentially a mortgage-length timeline.

What Does This Mean for You?

Whether you’re currently repaying loans, planning to borrow for graduate school, or preparing to support your child’s education, these changes will affect your financial strategy.

But there are steps you can take today to lessen the impact.

• Clarify Your Goals: Know your short- and long-term financial priorities. Are you planning to go back to school? Helping your child pay for college? Start mapping out what you’ll need and how you’ll fund it.

• Research All Options: With federal borrowing caps tightening, private loans may become a reality for some families, but pursue scholarships, grants, tuition reimbursement programs, and creative payment strategies first. The less you borrow, the more freedom you’ll have later.

• Build Your Repayment Muscle: Even if you’re not required to make payments yet (for instance, if your loans are still in forbearance), calculate what your payments would be and start setting that money aside each month. Put it into savings to boost your emergency fund, or use it to pay off other debt. This builds the habit without throwing your budget off balance later.

• Seek Professional Guidance: These changes are complex. Certified Student Loan Professionals (CSLPs) specialize in navigating repayment, forbearance, and forgiveness strategies. Don’t hesitate to consult someone who understands the nuances and can tailor advice to your situation.

Faith and Finances: Finding Peace Amid OBBB Changes

We know this information can feel heavy. Student loan debt has already been a burden for many, and these changes may feel discouraging. But as followers of Christ, we can anchor ourselves in the truth that God still has a plan for our lives, including our finances.

Scripture reminds us that God is our ultimate provider and source of wisdom. 

James 1:5 tells us that if we lack wisdom, we can ask God, and He gives generously. The same God who gave you the vision for your education will equip you with the resources and clarity to steward your finances well.

Instead of fear, approach these changes with faith and a plan. Use the time before 2028 as a gift to prepare. Trust God. Trust the process. And trust yourself to make decisions aligned with your values.

The OBBB represents a new era for student borrowing. While it brings challenges such as higher payments, lower borrowing limits, and longer forgiveness timelines, it also brings an opportunity for us as Christian women to pause, plan, and act with wisdom.

If you need help aligning your finances with your faith or creating a strategy for student loan repayment, we invite you to take the next step. 

Click here to download Your First Step to Financial Fulfillment, our free audio experience designed to help you align your money with your God-given vision.

Let’s walk this journey together so you can live on purpose, manage money confidently, and build wealth that reflects who you are in Christ.