The future of the federal student loan program after OBBBA

On March 19, 2026, the Center for Economic Security and Opportunity (CESO) hosted an event focused on how changes to the federal student loan program introduced by the One Big Beautiful Bill Act (OBBBA) will affect borrowers, institutions of higher education, and the loan administration system. In conjunction with the event, CESO released a report on the Public Service Loan Forgiveness program and a collection of previous work on student loans.

The event featured remarks from Congresswoman Suzanne Bonamici (D-Ore.), followed by an expert panel and a fireside chat with Under Secretary of Education Nicholas Kent, both moderated by Wall Street Journal reporter Oyin Adedoyin. Panelists included Colleen Campbell of Bellwether, Ben Cecil of Third Way, and Sarah Turner of the University of Virginia.

After an introduction by Senior Fellow Sarah Reber, Congresswoman Bonamici opened by emphasizing the importance of investment in education and the current crisis of education costs in the United States. She characterized OBBBA as a “dream killer” and proposed alternative solutions to address high college costs, including increasing support through the Pell Grant program and expanding work-study.

The panel discussion addressed the student perspective on the policy changes. Cecil explained that the chaos of the current student loan environment has had the unfortunate effect of disengaging borrowers from the system altogether. He underscored that students should not miss out on educational opportunities because they are fearful of the student loan system’s complexity.

Campbell echoed this sentiment. She recommended that students contact their student loan servicers or use self-service tools available through the Federal Student Aid (FSA) website to address their highly individual needs. Campbell noted that the FSA, though operationally unsteady (especially after substantial staffing cuts in 2025), is statutorily independent. Political polarization has led many to judge programmatic changes based on which administration was in charge, even when they are made by nonpartisan career staff.

On the policy adjustments introduced by OBBBA, the panel offered a slightly more optimistic outlook than Congresswoman Bonamici. Cecil noted that, across party lines, the public supports two of the major upcoming policy changes: earnings-based accountability for institutions of higher education and loan limits on graduate student borrowing. Cecil described how the current program available to graduate students, Grad PLUS, operates as a “double-edged sword”—on the one hand, it has allowed almost unlimited access to graduate education, but on the other, it has allowed some students to borrow more than they can reasonably repay, leading to financial problems for borrowers and costs for taxpayers.

Turner commented on the current landscape for undergraduate borrowers, who will face changes less visible and abrupt than those affecting graduate students. She highlighted that loan limits for undergraduates have not been adjusted since 2008, meaning the real value, accounting for inflation, has declined by roughly a third. This leaves students unable to meet the full cost of college, even after borrowing the maximum amount. OBBBA will further restrict borrowing by capping loans administered through Parent PLUS. Turner has argued that the new Parent PLUS limits are not well targeted to solve real problems with that program.

In conversation with Adedoyin, Kent outlined the priorities of the Department of Education in its implementation of OBBBA: connecting the labor market and higher education through the Workforce Pell program, holding higher education accountable for earnings outcomes, and putting pressure on institutions to reduce costs.

Kent defended OBBBA’s changes to the Grad PLUS program, including the controversial classification of certain fields as “professional degrees,” which allows students in those fields to borrow more than others (for example, under proposed regulations, aspiring physicians and lawyers would be able to borrow more than nurses). He emphasized that the policy’s goal is not to devalue any profession but to prevent students from taking on unmanageable levels of debt.

Throughout the event, participants noted the high level of turmoil in the student loan program over the last several years and the need to better support borrowers.