Why It Matters
New federal student loan policies took effect Wednesday in Ohio, affecting nearly 1.8 million borrowers across the state. The changes, part of the Trump administration’s One Big Beautiful Bill, reshape borrowing limits for graduate and professional students while phasing out a repayment assistance program that had capped federal loan payments for millions of Americans.
What Happened
The administration’s restructured student loan framework, signed into law one year ago, is now in full effect. Graduate students pursuing professional degrees—including law, medicine, dentistry, and veterinary medicine—face new annual borrowing caps of $50,000 and lifetime limits of $200,000. All other graduate programs are capped at $20,500 annually with a $100,000 lifetime maximum.
Parent PLUS loans, used by families to cover education costs, are now limited to $20,000 per dependent child annually and $65,000 total per child. New federal student loan borrowers are restricted to two repayment options: a tiered standard plan and a repayment assistance plan based on adjusted gross income, with a $50 monthly reduction per dependent.
The most significant change affects the federal SAVE program, which the Biden administration established in 2023. That program capped federal loan repayment at 5 percent of an undergraduate borrower’s disposable income. The administration is phasing out SAVE, and more than 7 million enrolled borrowers must select a new repayment plan by September or face automatic enrollment in the standard federal repayment option.
By the Numbers
1.78 million — student loan borrowers in Ohio
$35,072 — average student loan debt per Ohio borrower
428,740 — Ohio student loan borrowers currently in default
50% — Ohio borrowers younger than 35
20% — Ohio borrowers owing between $20,000 and $40,000
15% — Ohio residents carrying student loan debt
7 million — SAVE program borrowers nationally who must switch plans
Zoom Out
The policy shift reflects a broader federal approach to student lending. Nationally, roughly 9 million student loan borrowers are in default, and outstanding federal student loan debt exceeds $220 billion. Ohio’s default rate—428,740 borrowers—places the state among the hardest hit by repayment challenges.
The transition away from SAVE and toward more restrictive borrowing caps marks a departure from the previous administration’s expansive approach to loan forgiveness and income-based repayment. Advocates for borrowers have raised concerns about the affordability implications, particularly for those already managing multiple forms of debt beyond federal student loans.
What’s Next
The critical deadline looms in September, when the 7 million SAVE borrowers nationwide must actively choose a new repayment plan. Those who do not select an option will be automatically shifted to the standard federal repayment plan. Ohio borrowers should monitor communications from their loan servicers and review the newly available plans to determine which option aligns with their financial circumstances.
Advocacy groups argue that the new repayment assistance plan may not provide the same relief as SAVE for lower-income borrowers, though the plan does account for family dependents through its monthly reduction structure.