Federal student loan caps ushered in by 'Big Beautiful Bill.' Here's what expert says this means

HOUSTON, Texas (KTRK) -- For the first time ever, the federal government is putting a cap on student loan borrowing.

It's another change ushered in with the passage of the "One Big Beautiful Bill."

Borrowers will now have a lifetime limit of $257,500 for all federal student loans.

Joyce Beebe, Ph.D., a fellow in public finance at Rice University's Baker Institute, joined Eyewitness News live Tuesday morning and said this change signals the Trump administration's desire to distance the federal government from financing higher education.

This move mainly impacts students trying to pay for advanced degrees beyond a bachelor's.

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Nearly 8 million borrowers will see their loan balances start increasing again on August 1.

Beebe said students who can't pay for these degrees will now have to look for private loans, scholarships, or more lucrative financial aid deals from universities.

Private loans could come with more aggressive repayment terms and reduced legal protections.

The "One Big Beautiful Bill" also cuts the number of available repayment plans to just two. There's a new standard repayment plan and a new Repayment Assistance Plan.

Additionally, it cuts the amount of loans parents can take out to help a student pay for college.

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