The road map for families paying for higher education used to read something like this: Step 1, save if you can. Step 2, apply for aid and hope the schools will help.

Step 3, borrow money from the federal government, up to the total cost of attending, if you’re sure that is prudent and can’t pay the cost out of current income.

Now, Step 3 is changing, thanks to President Trump’s domestic policy bill. Starting July 1, 2026, the federal government will add new limits to what many people can borrow for college and graduate school.

Parents will be able to borrow only $20,000 per year, or $65,000 total per student, from the federal Parent PLUS program. Graduate students will have a $20,500 annual cap on their federal loans and a $100,000 total limit in most instances, not including their undergraduate debt. And professional schools — medical, law and the like — will generally have a cap of $50,000 per year and a $200,000 total limit.

High-priced professional schools, particularly those training doctors, veterinarians and dentists, can cost much more than the $200,000 cap. Even at some undergraduate institutions, the average PLUS-loan debt is currently higher than $65,000.

That creates an opportunity for so-called private student loan lenders that could add up to billions of dollars. The question is whether they will jump in — and do so fairly, with interest rates and terms that are not outrageous.