If you're a parent, grandparent, or even a student, changes to student loans might soon affect your financial plans. On the “Women & Money” podcast, financial expert Suze Orman recently broke down how a major new federal law — the One Big Beautiful Bill Act — will reshape federal student loans work starting in 2026.
Here's what Orman says you need to know and how it could impact families like yours.
One of the biggest changes Orman talks about involves the Parent PLUS loan program. She points out that under the old rules, parents could borrow up to the full cost of their child's college attendance. But starting next July 1, the maximum borrowing will be capped at $20,000 per year and a lifetime total of $65,000 per student.
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That means if you're planning to help pay for an expensive private college that costs $65,000 a year or more, you'll need to rethink your strategy.
And there's more: Parent PLUS loans taken after that date will no longer qualify for income-driven repayment plans. “I hate this one,” Orman said.
Instead, repayment will follow a standard plan with fixed payments over 10 to 25 years, regardless of income.
Orman advises parents to be cautious before taking out these loans. “A standard repayment plan is a whole lot more, so parents, you better think twice before you just take out a loan,” she said. Without income-driven options, monthly payments could be significantly higher.
Orman also broke down the impacts of the new law for students borrowing undergrad loans. Previously, subsidized loans did not accrue interest while students were in school. Now, all undergraduate federal loans will be unsubsidized starting July 1.
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What does this mean? Interest will accumulate during school and, if unpaid, will be added to the loan balance. This will increase the total amount owed and lead to higher payments once repayment begins.
“You might want to pay the interest on that loan yearly starting the very first year, because otherwise it’s going to compound,” Orman advised.
