The One Big Beautiful Bill (OBBB), signed into law July 4, contains provisions to lower the borrowing limits of federally provided student loans beginning July 1, 2026. In new research, Labor Policy Analyst Emmet Bowling explains why these student loan limits would likely exert downward pressure on tuition prices.

Key points:

• Aimed at saving taxpayer dollars and controlling the cost of higher education, the OBBB makes the following notable changes to the borrowing limits of federally provided student loans: adds a $257,000 combined lifetime aggregate limit for all loans, adds annual and lifetime caps to Parent PLUS, terminates Grad PLUS loans, and lowers the aggregate maximums to $100,000 for graduate programs and $200,000 for professional programs.
• The reform represents a small step toward better management of taxpayer exposure to the student loan program, and lowering borrowing limits may also reduce the rate at which tuition for higher education increases.
• Reductions in undergraduate tuition will likely be small, yet tuition for graduate and professional programs will likely be reduced more significantly, as the law makes more aggressive measures to reduce loan limits for these programs.

Read the analysis.