A new federal law is reshaping how millions of students and families repay their college loans, and Delta College is alerting students to prepare for the changes.
The One Big Beautiful Bill Act (OBBB), signed into law by President Donald Trump on July 4, 2025, expands repayment options, simplifies forgiveness rules, and tightens borrowing limits for part-time students. Some changes took effect immediately, while others will be phased in by July 1, 2026.
Delta’s Financial Aid Office notified students of the updates in an email this week, emphasizing that the law could alter borrowing and repayment for many currently enrolled.
Immediate changes
The first wave of reforms began on July 4. The most notable is a major expansion of income-based repayment (IBR), which now no longer requires students to prove “financial hardship” in order to qualify. Borrowers who enroll in IBR will see monthly payments capped at 10 percent of income, with any remaining debt forgiven after 20 years, according to Financial Aid’s email.
The law also opens the door for parents. Parent PLUS Loans, a federal loan often used to cover gaps in tuition for dependent undergraduates, are now eligible for income-based repayment if they have been consolidated.
For students pursuing Public Service Loan Forgiveness (PSLF), another key change is on the horizon. Payments made under a forthcoming repayment option — called the Repayment Assistance Plan (RAP) — will count toward PSLF. RAP is expected to launch by July 2026 and is designed to make monthly payments more affordable.
The act also reinstates older, simpler rules for loan forgiveness in cases where a school closes or misleads students. Those provisions, which apply to loans disbursed before July 1, 2025, could benefit borrowers who attended institutions that have since shuttered or faced legal scrutiny.
Changes coming in 2026
While some reforms benefit borrowers, others could tighten access. Beginning July 1, 2026, loan amounts for part-time students will be reduced to reflect enrollment status. Under the new formula, a student taking half the credits of a full-time load will be eligible for only half the loan amount.
“The bill, which includes $21 billion more in cuts than the initial amount directed by the House Budget Committee resolution, will make college more expensive, weaken the student loan safety net, force borrowers to pay even more on their monthly student loan bills, and make it harder for working families to achieve the American Dream,” the Student Borrower Protection Center, a nonprofit organization engaged in policymaking and advocacy regarding student debt, reported.
Details of the reduction schedule will be finalized in summer 2026, following a round of public feedback. College officials said they will host workshops to help students navigate the changes once the Department of Education releases the final formula.
The law’s other major change in 2026 will be the rollout of the Repayment Assistance Plan (RAP). While specific payment structures are still being finalized, RAP is expected to mirror IBR with caps on monthly payments tied to income and a pathway to forgiveness. Borrowers enrolled in RAP will also qualify for PSLF if they work in government or nonprofit sectors.
How Delta is responding
To help students prepare, Delta is pointing them to financial aid specialists, who are assigned to students by the first letter of their last name, and the Delta Connect Center in the DeRicco Building.
“As we learn more and get updates from the U.S. Department of Education, we’ll share more info with you through emails, workshops, and on our Financial Aid website,” the email reads.
Financial Aid Director Shawn Domingo did not respond to questions about details on Delta’s approach to the new law by deadline.
Who is affected
The immediate expansion of IBR and PSLF could benefit graduates entering the workforce or current students already carrying federal loans. For families, Parent PLUS eligibility may provide relief at a time when tuition costs continue to climb, according to Investopedia, a financial education and news outlet that provides analysis on economic and personal finance issues.
Concerns about the new law extend beyond Delta. A U.S. News & World Report survey of nearly 1,200 college students found many were uncertain about how the OBBB Act would affect their futures.
“Honestly, I’m cooked,” one student wrote in a survey response. “I wanted to go to medical school but now I won’t,” another added.
According to the California Community Colleges Chancellor’s Office, 54.6 percent of Delta College students were enrolled part-time in fall 2024, compared with 44.7 percent full-time. For them, the new borrowing limits may mean smaller loans that could leave gaps in covering living expenses, textbooks, or transportation.
However, just 1 percent of undergraduate students at Delta College borrowed federal student loans in 2023, according to the U.S Department of Education scorecard.
Students are encouraged to monitor their Delta email and the college’s financial aid website for updates. The Department of Education will release the finalized repayment schedule and RAP details next summer ahead of the July 1, 2026 rollout.
