Trump’s Big Beautiful Student Loan Bill: 8 Major Changes Borrowers Need to Know (2025 Guide)

Introduction

Student loan borrowers, take note: Donald Trump’s new proposal—nicknamed the “Big Beautiful Bill”—could dramatically reshape the federal student loan system. Whether you’re already repaying loans, preparing to borrow, or helping your child through college, these changes will likely impact you.

With student loan reform in the spotlight, this bill is being closely watched. Supporters say it will simplify a bloated repayment system, while critics warn it strips away protections for millions of borrowers.

Let’s break down the 8 biggest changes in the bill—and what they could mean for you.

Can Parent PLUS Loans Be Forgiven?

Yes, but forgiveness options are more limited than for other federal student loans. Still, there are four main paths to forgiveness in 2025:

1. Public Service Loan Forgiveness (PSLF)
2. Income-Contingent Repayment (ICR) Forgiveness
3. Total and Permanent Disability (TPD) Discharge
4. Borrower Defense to Repayment & Closed School Discharge

Let’s break each one down.

1. Public Service Loan Forgiveness (PSLF)

If you work full-time for a government or nonprofit employer, you may qualify for PSLF. This program forgives your remaining loan balance after 120 qualifying monthly payments (about 10 years).

To qualify with a Parent PLUS Loan:

• You must consolidate your Parent PLUS Loan into a Direct Consolidation Loan
• You must repay it under the Income-Contingent Repayment (ICR) Plan
• You must work full-time (30 hours or more per week) at a qualifying public service job

Important: PSLF is only available to the parent who took out the loan, meaning your eligibility is determined by your employer, not your child’s. It doesn’t count if your child works in public service.

2. Income-Contingent Repayment (ICR) Forgiveness

Parent PLUS Loans don’t qualify for most income-driven repayment plans. But they can qualify for ICR after consolidation. (Psst! It’s possible to qualify for other income-driven plans by taking advantage of a little-known loophole. We’ll discuss this further on in our article.)

Here’s how it works:

• First, consolidate the Parent PLUS Loan into a Direct Consolidation Loan
• Apply for the ICR Plan
• Make your payments in full and on time every month for 25 years, making sure to recertify your plan with your servicer annually

Under ICR:

• Your payment is 20% of your discretionary income
• The repayment length is 25 years (think of it as 300 qualifying payments)
• Any remaining balance after 25 years is forgiven

While this plan doesn’t offer the lowest payments, it’s the only income-based option for Parent PLUS Loans. For many parents, it’s the only way to lower monthly payments.

Legislative watch: A new Senate bill may eliminate ICR for new borrowers and replace it with a stricter "RAP" plan. If you're considering consolidation, act before these changes take effect in July 2026.

3. Total and Permanent Disability (TPD) Discharge

If the parent borrower becomes totally and permanently disabled, the loan may be wiped out entirely.

To qualify:

• Show proof of disability from the VA, SSA, or a doctor
• Meet all paperwork requirements

This discharge clears the debt, and it is not taxed federally through 2025.

4. Borrower Defense to Repayment & Closed School Discharge

If your child’s school lied or misled you, you may qualify for Borrower Defense to Repayment.

This program is rare but can lead to full forgiveness. You must prove the school broke laws or gave false information (like job rates or accreditation).

On the other hand, if your child was unable to complete their education program because their school closed, you may qualify for a Closed School Discharge. 

If your child’s school closes on or after July 1, 2023 and you meet the eligibility requirements, your loans may be automatically discharged by the Department of Education. All others will need to apply on their own.

You can apply for both discharge programs online at studentaid.gov.

Repayment Options for Parent PLUS Loans

Parent PLUS Loans have fewer repayment choices. But here are your options:

FAQs: What Borrowers Are Asking About the Big Beautiful Bill

Final Thoughts: A Bill That Reshapes the Landscape

Trump’s Big Beautiful Bill dramatically changes how federal student loans work. Over the nest few years, the bill will:

• End the SAVE Plan and other borrower-friendly IDR options
• Eliminate Grad PLUS loans, reducing access to graduate education
• Raise the bar for getting loan relief from predatory schools
• Limit options for future borrowers and parents

On the upside, rehabilitation access expands for those in default.

This is a high-stakes moment. Whether you’re managing loans now or planning for the future, staying informed is critical. Review your loan types, monitor program deadlines, and take action while your current options are still available.

👉 Need expert guidance? At Docupop, we specialize in helping borrowers navigate the complexities of student loan repayment—so you don’t have to do it alone.

Contact us today to get personalized support and ensure you’re on the right path to managing your student debt.

Don’t wait—take control of your student loans now!