Student‑loan changes heating up

U.S. and U.K. student-loan policy are both shifting in 2026, with tighter borrowing rules in America and a new repayment fight in Britain. (thestreet.com) (committees.parliament.uk) In the United States, major federal loan changes start July 1, 2026. The new rules were enacted in Public Law 119-21, and they eliminate Grad PLUS loans while adding new borrowing limits across the Direct Loan system. (congress.gov) (thestreet.com) Congressional Research Service says Public Law 119-21 ends Grad PLUS loans for graduate and professional students and creates new lifetime maximum limits, even if prior balances are later paid down, discharged, or forgiven. TheStreet reported families that once used federal loans to cover the full cost of attendance will face narrower options. (congress.gov) (thestreet.com) Parent borrowing is also being narrowed. Congress.gov says the law places a $20,000 annual limit and a $65,000 lifetime limit per dependent student on Parent PLUS borrowing beginning July 1, 2026. (congress.gov) At the same time, the Trump administration is moving defaulted federal student-loan accounts toward the Treasury Department. The Education Department said on March 19, 2026, that Treasury will assume operational responsibility for collecting defaulted federal student-loan debt under a new interagency agreement. (ed.gov) Education said its portfolio stands at nearly $1.7 trillion, with fewer than 40 percent of borrowers in repayment and almost 25 percent in default. Secretary Linda McMahon told borrowers on March 19 that they should keep paying through their current servicers while Federal Student Aid communicates future changes. (ed.gov 1) (ed.gov 2) The administration says the Treasury partnership will improve collections and borrower support. Critics have raised concerns in recent reporting that shifting defaulted accounts first could make repayment and rehabilitation harder for some borrowers. (ed.gov) (businessinsider.com) In England, the argument is not about new borrowing caps but about how much graduates repay after they leave university. The Treasury Committee opened an inquiry on March 12, 2026 into student-loan repayment terms and the taxation of graduates. (committees.parliament.uk) The committee said borrowers on Plan 2 repay 9 percent of earnings above £28,470 from the April after graduation, and that Chancellor Rachel Reeves’s 2025 Budget froze that threshold for three years from April 2027. Chair Dame Meg Hillier said MPs are examining whether “the goalposts” were moved unfairly. (committees.parliament.uk) A report published April 13 by the Higher Education Policy Institute, the National Union of Students, and London Economics said changes to Plan 2 since early 2022 will produce a £679 million Treasury surplus on the 2022-23 cohort in England. The report said graduates from that cohort earning £40,000 or more would repay £740 more in 2032 than under the original Plan 2 terms. (hepi.ac.uk) That report also said male graduates would pay an average £13,400 more over their lifetimes and female graduates £16,900 more, while the repayment-threshold freeze alone cuts Treasury costs by £1.3 billion for the 2022-23 cohort. The Treasury Committee’s inquiry closes on Tuesday, April 14, 2026. (hepi.ac.uk) The practical effect on both sides of the Atlantic is that student loans are becoming less open-ended and more politically contested. In the United States, the next hard date is July 1, 2026; in Britain, the next marker is what MPs and ministers do after the current inquiry. (congress.gov) (committees.parliament.uk)