The Student Loan Rules Just Changed—And Most Families Aren’t Ready

By Dr. Shaan Patel, CEO & Founder of Prep Expert®

Student loans have always been complicated. But starting in the 2026–27 academic year, they’re about to get even more so.

New federal rules tied to legislation passed last year will significantly reshape how students and parents borrow and repay for college. Some loan programs are going away. Repayment options are narrowing. And families who don’t plan ahead may find themselves with fewer choices — and higher long-term costs.

I’ve spent years helping students and parents navigate college affordability, and the message I keep repeating is simple: the earlier you understand these changes, the more control you’ll have over your financial future.

Here’s what families need to know.

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A Major Shift Is Coming in 2026

While the legislation affecting student loans was signed last year, many of its most important provisions don’t take effect until July 1, 2026. That timing matters enormously for students planning to start college or graduate school in fall 2026 or later.

The goal of these changes is to simplify the student loan system. But simplification doesn’t always mean better outcomes for borrowers.

For many families, it means fewer safety nets and less flexibility.

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The End of Graduate PLUS Loans

One of the biggest changes is the discontinuation of the Federal Graduate PLUS Loan program. For years, Graduate PLUS loans allowed students pursuing law school, medical school, business school, or other graduate degrees to borrow up to the full cost of attendance.

That option is going away.

Students planning to attend graduate school after July 2026 will need to rely on a mix of federal unsubsidized loans, private loans, savings, or employer assistance. This is a major shift, especially for students entering high-cost professional programs.

The takeaway is clear: graduate education will require more upfront planning and alternative financing strategies than ever before.

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Fewer Repayment Options Going Forward

Another significant change is the reduction in repayment plans.

Previously, borrowers could choose from a wide range of repayment options. Under the new rules, there will essentially be two paths:

1. Standard repayment
2. Income-driven repayment

Standard repayment terms will now depend on how much you borrow. Students with smaller balances may still see 10-year terms, while those borrowing six figures could be placed on 20- or even 25-year repayment schedules.

Income-driven plans will still exist, but forgiveness timelines are getting longer. Instead of 20 or 25 years, some borrowers may now need to stay on these plans for up to 30 years before seeing forgiveness.

That’s not inherently bad — but it changes how borrowers should think about debt, career choices, and long-term planning.

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What Current Borrowers Should Do Now

If you already have student loans, the coming changes don’t mean you’re stuck — but they do mean you need to pay attention.

Borrowers may be able to voluntarily switch into new repayment options or consolidate existing loans. In some cases, staying in a current plan may be more advantageous than moving to a new one.

This is where many people make mistakes: they assume the system will automatically choose the best option for them. It won’t.

Borrowers should proactively contact their loan servicers, review whether they’re grandfathered into existing plans, and understand how consolidation might affect interest rates and forgiveness timelines.

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Parent PLUS Loans and Strategic Borrowing

For families with multiple children, Parent PLUS loans remain an option — and in some cases, a strategic one.

One approach some families consider is spreading borrowing across parents when possible, rather than concentrating all Parent PLUS loans under one borrower. Done correctly, this can sometimes reduce interest rate impacts and avoid compounding eligibility issues.

That said, Parent PLUS loans should never be taken lightly. They place legal responsibility on parents, not students, and repayment can extend well into retirement if not carefully planned.

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Why Scholarships and Test Scores Matter More Than Ever

As federal borrowing becomes more restrictive, reducing how much you need to borrow upfront is critical.

This is where scholarships, grants, and merit-based aid play an outsized role. Strong SAT or ACT scores, well-prepared applications, and early planning can translate into tens — or even hundreds — of thousands of dollars in savings.

Every dollar earned in scholarships is a dollar you don’t repay with interest later.

I’ve seen countless students focus only on admissions, without realizing that their test scores and preparation could dramatically lower their long-term financial burden.

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Final Thoughts

The student loan system is changing, and families who don’t adapt will feel the consequences years down the line.

Fewer loan options, longer repayment timelines, and the elimination of certain programs mean that planning ahead is no longer optional. It’s essential.

Whether you’re a student, a parent, or a current borrower, the smartest move you can make right now is to educate yourself, explore alternatives, and reduce reliance on debt wherever possible.

Because the rules may be shifting — but preparation will always be the best strategy.

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Dr. Shaan Patel is a Shark Tank winner, bestselling author, and founder of Prep Expert®, an education company that has helped students improve test scores, win scholarships, and gain admission to top universities. He scored a perfect SAT and is passionate about expanding access to education worldwide.