Access to higher education has become more inclusive, welcoming students from diverse backgrounds. Financial aid and flexible programs have increased enrollment in colleges and graduate schools. However, the introduction of HR1 could affect future decisions about attending college.
HR1 will change student loan repayment options, set new borrowing limits, and alter federal financial aid. It impacts Direct Subsidized Loans, Direct Unsubsidized Loans, and Direct PLUS Loans. These loans offer different interest rates and repayment terms.
Starting July 1, 2026, assets like family farms will not be part of federal financial aid eligibility calculations under FAFSA. This change may make it easier for some individuals to qualify for aid.
Pell Grants are also affected by HR1. Starting July 1, 2026, Pell Grant funds can be used for non-degree programs at accredited institutions. However, if a school's financial aid equals or exceeds attendance costs, the student won't receive a Pell Grant.
New borrowing limits will apply to graduate students and their parents starting July 1, 2026. Parents can borrow up to $20,000 per year with a lifetime cap of $65,000 per student. The Grad PLUS program will impose caps on professional school degrees and other graduate degrees.
Student loan repayment options will be streamlined under HR1 beginning July 1, 2026. Borrowers can choose between a standard repayment plan or the Repayment Assistance Plan (RAP). The standard plan requires fixed payments over several years based on the loan amount. RAP ties payment amounts to a borrower's adjusted gross income.
The SAVE plan will end on August 1, 2025. Under this plan, payments were based on 5% of income. With its elimination and changes in repayment plans under HR1, some borrowers may struggle with payments.
HR1 also removes deferments for economic hardship and unemployment while reducing forbearance periods from 12 to nine months.
Current students must stay informed about these changes as they assess higher education affordability under HR1's impact on student loans.
