Commentary How OBBBA reshapes student lending
January 28, 2026
This document provides a detailed overview of how the One Big Beautiful Bill Act (OBBBA)—passed into law in the summer of 2025 and set to take effect in just a few short months—changed higher education financing. It describes the state of student lending at the time of its passage, analyzes how the law changes borrowing, repayment, and institutional accountability, and explores some key implications for students, families, and the federal budget.
In 2025, about 43 million Americans owed more than $1.6 trillion in federal student debt. Following the end of the pandemic-era payment freeze in October 2023, and further temporary protections over the year that followed, delinquencies and defaults surged. By then, borrowers were enrolled in a variety of repayment plans, including several million borrowers left frozen in administrative forbearance.
