New changes to financial aid will be minor for UND students, bigger for loan borrowers in repayment

GRAND FORKS — Student loan repayment options and federal PLUS loans are seeing the biggest changes with the implementation of the federal One Big Beautiful Bill Act, said the director of student finance at the University of North Dakota.

Matt Lukach said students will see minor changes, but most of the work to make the alterations will fall upon UND’s system.

“It’s going to create work on our end, though, because all these changes will be manual, so we will have a lot more work on the back end. But hopefully, our students won’t see too much of a change from past years,” he said.

On Wednesday, July 1, changes to federal student aid programs from the OBBBA went into effect. Of the changes, Luckach sees the removal of the SAVE (Saving on a Valuable Education) loan repayment plan, the removal of the Graduate PLUS Loan Program and the alteration to the Parent PLUS Loan Program and scheduled reductions for federal loans at the undergraduate level as the most significant.

For undergraduate loans, students previously could get their full federal loan even if they were not a full-time student taking 12 credits. Following the changes, loans will be pro-rated down, depending on how many credits a student is taking. Most of UND’s undergraduate students are full-time students, Lukach said. For part-time students, UND will work to make adjustments to loan offers early so they won’t be as affected if they need to find alternative funding. UND already makes schedule reductions for Pell Grant funding.

A big change that may affect graduate students is the removal of the federal Graduate PLUS Loan Program. Some graduate students have used it to fund living expenses and pay for shortfalls while they finish their program. Graduate borrowers who have had a PLUS loan disbursed before July 1, 2026, while enrolled in a program, can continue to borrow for three academic years or the remainder of their program, whichever is less. Newer graduate students won’t be able to get the loans, and Lukach has seen movement in the private loan sector to balance this.

“We have had a lot of traffic, a lot of movement in the private loan sector in the last year to come up with options to help fill that gap of graduate PLUS loans,” he said. “The private educational loan industry is doing a pretty good job of coming up with some really comparable options to that loan.”

The Parent PLUS Loan Program won’t be going away, but it will be capped. Eligible parents can borrow a maximum of $20,000 per aid year per dependent student. In the past there was no cap, but Lukach said there wasn’t a high percentage of parents borrowing more than $20,000.

In Lukach’s opinion, the financial aid changes will be minor to current and incoming students. The bigger changes, he said, are in student loan repayment.

The SAVE plan, PAYE (Pay As You Earn) plan and the ICR (Income-Contingent Repayment) plan all are being phased out. Loan servicers are reaching out to current borrowers notifying them they have to choose different plans, though they can pay through the ICR plan until July 1, 2028. Their other options include a new tiered standard repayment plan and the new Repayment Assistance Plan.

RAP allows borrowers to pay monthly payments of 1-10% of the borrower’s income based on their adjusted gross income, with a minimum monthly payment of $10.

“I honestly don’t know what the effects of these new plans will be yet, because we’ve not heard from anybody, and they just went into effect,” Lukach said. “I’m sure we’ll see some chatter in the next few months on that (RAP) to see if it looks good, bad, the same. It’s hard to tell if it will be a benefit or a detriment to those people who are on the SAVE plan. We’re real early in this.”

New borrowers who borrow loans on or after July 1, 2026, have the options of the new tiered repayment plan or RAP.

Same as any other year, Lukach offers students this advice: Make a financial plan and know what is needed.

UND also has a monthly payment plan to cover gaps between a student’s charges and their financial aid, something Lukach has noticed students use more over the years. Overall, he’s seeing students be more fiscally responsible.

“It’s a good sign,” he said. “It means we have really high-quality students at the University of North Dakota, which I really, really love.”