Key Takeaways With nearly $1 trillion being cut from Medicaid over the next decade, the program’s recipients could start seeing changes soon.

Eligibility requirements will change, limiting retroactive coverage and pushing up the program’s verification date.

Health care coverage will be severely impacted, particularly for rural communities, and states will be forced to front more of the costs than they previously have.

Nearly $1 trillion will be cut from the Medicaid program over the next decade now that the “One Big Beautiful Bill” has been signed into law.

These cuts will be the largest ever to the program, according to the Center on Budget and Policy Priorities. Experts estimate that almost 12 million recipients will be without health care coverage over the next 10 years.

Here is what America’s over 71 million Medicaid recipients need to know about the bill.

Changes To Who Is Eligible

The bill changes who is eligible to receive Medicaid. It requires “able-bodied” recipients to work, volunteer, or go to school at least 80 hours per month if they are between the ages of 19 and 64.

Those who are disabled, pregnant, or caring for a child younger than 14 will be exempt.

Recipients will also be required to verify their eligibility twice a year, whereas they only currently need to do so once.

Retroactive Coverage Will Be Limited

States currently cover Medicaid benefits retroactively for three months before an eligible individual signs up for coverage. But the One Big, Beautiful Bill shrinks that window to just one month, according to health care think tank KFF.

There Will Be Changes in Care

Medicaid is the biggest source of funding for long-term care for disabled and elderly people. It covers more than half of the $415 billion spent on these services every year, according to KFF.

Without federal funding for Medicaid, many nursing homes would have to rely on more state funding to stay open. But many states don’t have room in the budget to help, which could force some facilities to close.

Those that don’t, however, will likely be overwhelmed, forcing more seniors to visit hospitals or emergency rooms for care. Many of these hospitals are also heavily funded by Medicaid, which means that care for everyone–not just those covered under Medicaid–could be impacted.

A new program, the Rural Health Transformation Program, was created to help rural areas of America that will be hit hard by the Medicaid cuts. The program will allocate $10 billion across all 50 states for five years, according to the Bipartisan Policy Center, and will be implemented starting in 2026.

The program, however, won’t be enough to offset the Medicaid cuts hitting rural America, some hospital executives say.

Millions of sick and disabled people also rely on family members to take care of them. If these caretakers don’t have enough time to take another job, per the new eligibility requirements, they might lose their own Medicaid coverage.

The Big Beautiful Bill also strips Planned Parenthood of any Medicaid funding for women’s health care. While Medicaid generally cannot be used to cover abortions (except in certain cases), it can be used for contraception, cancer screenings, wellness exams, and other preventative care that Planned Parenthood offers.

Medicaid Recipients Will Have Co-Pays For Services

States will be required to impose co-pays of up to $35 for medical services on people with incomes more than 100% of the federal poverty level. In 2025, that’s $15,650 for individuals and $32,150 for a family of four.

The law does include exceptions for certain types of health care providers. It also allows providers to turn away patients who cannot afford the co-pay for medical services.

State Budgets Will Tighten

Under the Big Beautiful Bill, states will be responsible for more of the costs of operating the Medicaid program–costs that currently come from federal funding.

“Very few of these states are going to have the resources to replace the federal money that they lose, so they’re going to be forced, in many cases, to redefine who is eligible for the program,” Maria Freese, senior legislative representative at the National Committee to Preserve Social Security and Medicare, previously told Investopedia.

The bill also curtails provider taxes, which every state except for Alaska currently uses to help fund their Medicaid programs.

A provider tax is a health care-related fee, assessment or other mandatory payment where at least 85% of the burden of the tax revenue falls on health care providers. States can levy taxes and assessments on a variety of provider types, like hospitals and nursing facilities in order to help fund Medicaid.

Maximum Home Equity Levels Will Also Take Effect

Under the bill, Medicaid applicants will not qualify if their home equity is valued at more than $1 million. That figure is not eligible to be adjusted for inflation.

There are currently state-determined maximum limits on home equity, which fall between $730,000 and $1,097,000, and are indexed to inflation.

This means that if an individual resides in a home valued above $1 million, even if they don’t make enough money to sustain themselves, they will be considered ineligible for Medicaid.

“This change will be particularly harmful in states with higher property values like California, New York, Massachusetts, New Jersey, and Washington,” said Dan Adcock, director of government relations and policy at the National Committee to Preserve Social Security and Medicare.

What borrowers should know about student loan changes in the One Big Beautiful Bill

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If you’re a federal student loan borrower or about to become one, your head may be spinning.

On July 4, when President Trump signed the One Big Beautiful Bill Act into law, he also greenlit a history-making overhaul of the federal student loan system — one that will affect the lives of many, if not most, of the United States’ nearly 43 million student loan borrowers.

And boy is it a lot to unpack, with new, tighter borrowing limits and dramatically reduced repayment options, to name just a few of the sweeping changes.

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In May, we explained this overhaul, as conceived by House Republicans. Now that a Senate compromise has been signed into law, here’s an updated guided tour of the final changes.

Let’s start with the elephant in the room:

President Biden’s SAVE plan is ending

The most generous repayment plan is the Biden-era Saving on a Valuable Education (SAVE) plan. But it is so generous, with its low monthly payments and expedited loan forgiveness, that Republicans have so far successfully argued in court that it is too generous. In fact, the nearly 7.7 million borrowers currently enrolled in SAVE have been in legal limbo for months, without interest accruing or required monthly payments.

That’s about to change.

“For all practical purposes, I would say SAVE is just kind of dead at this point, even if it’s technically on life support,” said Preston Cooper at the conservative-leaning American Enterprise Institute (AEI).

This month, the U.S. Education Department announced that on Aug. 1, SAVE borrowers will, once again, see their balances grow — with interest. Because the SAVE plan is still enjoined, though, borrowers won’t yet be required to make payments. Still, Cooper said that many borrowers, rather than watch their loans balloon, will likely want to move to a different plan.

Roxanne Garza, director of higher education policy at the liberal-leaning EdTrust, worries that the relatively last-minute announcement about interest accrual will cause problems for the Education Department, which saw roughly half its staff cut by the Trump administration.

“I think what will likely happen now is you will see a rush of people trying to take action that will, again, likely create an even bigger backlog,” said Garza.

Under the One Big Beautiful Bill Act, borrowers in SAVE will have to change plans by July 1, 2028, when SAVE will be officially shut down. If they wait, though they currently can’t be required to make payments, they will see their loans explode with interest.

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But the two new plans that the law creates won’t be ready for a year, and the department’s own website, meant to help borrowers navigate their repayment options, does not reflect this confusing new landscape, except for a banner that says: “Loan Simulator will be updated at a later date to reflect recent legislative changes.”

Beginning July 1, 2026, new loans will be subject to new borrowing limits

Undergraduates won’t see any changes to their loan limits. But it’s a very different story for graduate students and parents.

For graduate students, new limits will make it harder for lower- and middle-income borrowers to attend pricier graduate programs. The current grad PLUS loan allows students to borrow up to the cost of their graduate program, but Republicans are shutting it down this time next year.

After that, grad students’ borrowing will be capped at $20,500 a year with a lifetime graduate school loan limit of $100,000, a big drop from the previous cap of $138,500.

How big a deal will this be? AEI’s Cooper has been crunching the numbers and said, “Just under 20% of master’s students borrow above the proposed limits.”

Borrowers working toward a professional graduate degree (i.e., medical or law school) will have their borrowing capped at $50,000 a year and their lifetime cap increased from $138,500 to $200,000.

Parents and caregivers who use parent PLUS loans to help students pay for college will also see new loan limits. They will be capped at $20,000 a year and, in aggregate, at $65,000 per child.

Cooper says only one-third of parent PLUS borrowers with dependent children currently take out more than this new annual loan cap.

The law also sets a new lifetime limit, for undergrad and graduate loans combined, at $257,500 per person.

Repayment options for borrowers are changing dramatically

Republicans are reducing repayment options for new borrowers from the current seven plans down to two new plans. The new plans are:

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1. The standard plan

New borrowers will be assigned a repayment window of between 10 and 25 years, depending on the size of their debt, with equal monthly payments like a home mortgage.

Under this plan, borrowers with larger debts would qualify for a longer repayment period:

Owe less than $25,000, and repay over 10 years.

Owe $25,000 or more but less than $50,000? Repayment expands to 15 years.

Owe $50,000 or more but less than $100,000: Repay over 20 years.

Anyone owing $100,000 or more would repay over a 25-year period.

2. The Repayment Assistance Plan (RAP)

For borrowers worried they don’t earn enough to cover the inflexible monthly payments of the new standard plan, Republicans have also created the Repayment Assistance Plan (RAP).

On RAP, payments would largely be based on borrowers’ total adjusted gross income (AGI).

Borrowers earning no more than $10,000 would be asked to pay $10 a month.

Earn more than $10,000 but not more than $20,000, and your payment will be based on 1% of AGI.

More than $20,000 but not more than $30,000, it would be 2% of AGI and so on up the income scale.

Repayment tops out at 10% of AGI for borrowers earning $100,000 a year or more.

Current borrowers will also have access to this new RAP plan, as well as to some older plans.

RAP is the latest in a long line of income-based repayment plans. How does it compare with previous plans?

Monthly payments for many middle-income borrowers on RAP will be lower compared with earlier plans, according to multiple experts. But RAP is not as generous as the Biden-era SAVE plan, which, again, is being phased out.

RAP will require even the lowest-income borrowers to make a minimum monthly payment of $10, ending the $0 option of previous plans and making it more expensive for these borrowers.

This new $10 minimum payment wouldn’t make a big difference to the government’s coffers, said Jason Delisle, who spoke to NPR in May, when he was studying student loan policy at the Urban Institute. Delisle has since been appointed to a position in the Trump administration.

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Delisle said the purpose of RAP’s new $10 minimum payment likely stems from “emerging research that requiring people to make some payment each month is good because it keeps them connected to the loan and makes it less likely that they’ll default.”

But some borrower advocates worry that this new minimum payment could have the opposite effect.

For the lowest-income borrowers, asking for $120 a year is “significant,” EdTrust’s Garza told NPR in May. “I think having that be a required minimum payment will likely push more borrowers into default.”

But RAP also comes with a few new perks that borrowers will likely appreciate.

RAP will waive any interest that is left after a borrower makes their monthly payment.

If their monthly payment is $50 but they owe $75 a month in interest, the government will waive the remaining $25.

The result: Borrowers will no longer see their loans grow, which was a common downside to previous income-driven repayment plans.

Borrowers on RAP will also see their balances go down every month.

The government will pitch in up to $50 to make sure lower-income borrowers see their principal balances shrink.

For example, a borrower whose monthly payment makes only a $30 dent in their principal would see the government knocking off an extra $20 a month.

Borrowers whose monthly payments already reduce their principal balance by at least $50 would get no extra help from the government.

“It’s a form of monthly loan forgiveness,” Delisle said. “It’s a drip, drip, drip of loan forgiveness, rather than waiting for the big payout at the end of 20 years.”

The loan forgiveness math will change.

While previous plans offered forgiveness after 20 or 25 years, the RAP would extend that to 360 qualifying payments, or 30 years. That’s a big difference, said AEI’s Cooper.

Borrowers with typical levels of debt “and typical incomes for their degree level are almost always gonna pay off well before they hit that 30-year mark,” Cooper said. “So if you’re going into RAP, I wouldn’t be thinking about forgiveness because you’re probably gonna pay it off before you hit 30 years.”

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In short, the days of what Delisle called “the big payout” are over.

But wait! Current borrowers have another loan forgiveness option (sort of).

In addition to RAP, an older plan known as Income-Based Repayment (IBR) will still be available to borrowers who take out their loans before July 1, 2026.

Part of the reason IBR remains is that, unlike other income-driven repayment plans, IBR wasn’t created by the Education Department. It was created by Congress and is codified in statute.

How does IBR work? For borrowers with loans older than July 2014, their payments are capped at 15% of discretionary income. Payments on younger loans are capped at 10%.

With the Biden-era SAVE plan being wound down, Delisle said, most lower- and middle-income borrowers would likely have lower monthly payments on the new RAP compared with IBR.

But, Delisle said, borrowers with older loans might still want to enroll in IBR if they’ve been in repayment for close to 20 or 25 years, so they can qualify for loan forgiveness.

That’s because, on IBR, pre-2014 loans qualify for forgiveness after 25 years. For newer loans, it’s just 20 years — both considerably shorter than RAP’s 30-year schedule.

One big caveat to all this: The Education Department has temporarily stopped processing all loan forgiveness for borrowers on IBR because of the legal actions surrounding the SAVE plan, according to a statement from Education Department Deputy Press Secretary Ellen Keast.

Keast said the Biden-era rule explaining SAVE “provided the authority to count forbearances in IBR toward loan forgiveness” and, because that rule has been frozen by the courts, the department can’t accurately determine loan forgiveness under IBR. “Discharges will resume as soon as the Department is able to establish the correct payment count,” Keast said.

The department told NPR that any borrowers who make payments after they’re eligible for forgiveness will eventually get a refund.

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Edited by Nicole Cohen

Topline The House passed the Senate’s version of President Donald Trump’s sweeping domestic policy bill Thursday, sending it to Trump to sign, as the bill proposes a major overhaul of student loan programs and repayment plans that restricts how much students can borrow and the payment plans they use to pay the loans back. Copyright 2025 The Associated Press. All rights reserved

Key Facts

The House passed the bill Thursday in a 218-214 vote, giving the bill its final stamp of approval before it goes to Trump’s desk after the Senate passed it earlier this week. The bill imposes significant changes to the federal student loan program, including new caps on student loans and restricting new borrowers to only two options for paying off their loans, either through a standard repayment plan (paying the same amount every month) or a new plan based on annual income. The final version of the bill toned down some controversial proposals that were present when the House initially passed it, however, including calculating how much a student can get in loans based on the median cost of their similar program of study across all schools—rather than how much their tuition actually costs—and more stringent caps on how much students and their parents can borrow. The Senate Parliamentarian also forced lawmakers to make changes to the bill before it passed, ruling last week some aspects of the student loan proposals should be struck from the bill because they don’t meet the criteria for the Senate to pass the bill through reconciliation—a process that allows the chamber to approve some budget-related measures with only a simple majority rather than 60 votes. One part of the bill struck down by the Parliamentarian would have forced borrowers who are already paying off loans to switch to the new repayment plans, while another would have barred non-citizens from receiving student aid. Student borrower advocates have harshly decried the legislation, with the Student Borrower Protection Center (SBPC) projecting based on an earlier version of the bill that it would force a typical borrower with a bachelor’s degree to pay $3,000 more per year.

Trump’s Bill Imposes New Maximum Borrowing Limits

The bill changes existing caps on federal student loans, but the final version tones down more extreme limits that had been proposed in the initial version passed by the House. The bill limits parents to borrowing $20,000 per year for each child, with a $65,000 total cap per student. It also limits graduate students to $20,500 per year in loans and $100,000 in total, while students in professional schools, like medical school, are limited to $50,000 in loans per year and $200,000 in total. The Senate slightly raised the overall lifetime cap on student loans from the original House version, now capping all federal student loans that a borrower receives—excluding Parent PLUS loans—at $257,500. Those limits will all take effect on July 1, 2026, but students who are already borrowing money will be allowed to use the old rules until they finish their program of study.

The Plan Cuts Some Loan Eligibility

The final bill gets rid of the Graduate PLUS loan program, eliminating the loans past July 1, 2026. Senators watered down restrictions from the original House bill, however, getting rid of language that would have limited when parents could take out loans and eliminated subsidized loans for undergrads. The Senate also tried to keep the restrictions on non-citizens receiving student aid, but the Senate Parliamentarian said lawmakers could not impose those restrictions.

Trump’s Policy Bill Gets Rid Of Most Student Loan Payment Plans

The final bill abolishes most of the current options borrowers have to repay their student loans, instead giving borrowers the choice of only a standard repayment plan or a new Repayment Assistance Plan (RAP) based on annual income. The standard repayment plan means borrowers will pay back their loan at a fixed rate each month. Loans of up to $25,000 will be paid over the course of 10 years, loans of up to $50,000 will be paid over 15 years, loans of up to $100,000 will be paid over 20 years and loans over that amount will be spread out over 25 years. RAP replaces existing income-driven repayment plans, but still allows borrowers to make their monthly payments based on income. Borrowers pay rates based on their annual income (including their spouse’s income), which ranges from $120 per year for those making less than $10,000 (divided up into $10 monthly payments) to 10% of gross annual income for those making over $100,000. Unlike previous income-based plans, RAP allows borrowers’ remaining loans to be forgiven after 30 years of making payments—up from 20 or 25 years under current plans—and has a minimum payment of $10 each month, while low-income borrowers have been able to qualify for $0 repayments.

Who Will The Changes To Student Loan Payments Affect?

While the initial House and Senate versions of the bill would have forced all existing borrowers paying off loans to switch to the new repayment plans, the Senate Parliamentarian struck that down, ruling senators cannot pass it with only a simple majority. The final bill restricts anyone who takes out loans after July 1, 2026, to only repay them through the new standard repayment plan or RAP, but keeps existing income-based repayment plans in place for those who are already paying off loans.

Trump’s Policy Bill Adds Restrictions For Pell Grants

The final bill got rid of previous restrictions the House originally proposed on Pell Grants for part-time students, but disqualifies students from Pell Grants if their student aid index—a number demonstrating a student’s financial need, based on their families’ financial resources and expenses—is at least twice the maximum Pell Grant given that year. The bill also establishes a new Pell Grant program for short-term workforce training programs, and says borrowers aren’t eligible for Pell Grants during any term where they’re already receiving other student aid (whether federal, state, from the institution or from private sources) that covers their full cost of attendance.

Trump’s Bill Changes Forbearance And Deferring Payments On Student Loans

Trump’s policy bill gets rid of rules that allow borrowers to temporarily have their loan payments deferred due to unemployment or economic hardship, which will apply to borrowers who take out loans starting in July 2025. The bill also places new limits on forbearance—a temporary pause on loan payments—which states loans can’t be in forbearance for more than nine months during any 24-month period. The legislation does help borrowers by allowing them to now rehabilitate their loans twice, rather than once. That refers to when borrowers can get out of being in default on their loans by making a certain number of on-time payments under a rehabilitation agreement.

Potential Impacts Of The Trump Policy Bill

The new restrictions on federal student loans could force more students and parents to turn to private lenders, which account for less than 10% of all student loans issued. Private loans have many disadvantages compared with federal ones, as they typically have higher interest rates, are not eligible for income-based repayment plans and don’t offer forgiveness programs. When it comes to paying off loans, SBPC projects RAP will broadly increase borrowers’ payments compared with previous Biden-era income-based payment plans designed to help borrowers make lower payments. The average borrower with a college degree will pay $2,928 more per year than under the Biden-era SAVE plan, SBPC estimates, and the bill also means borrowers will spend longer paying off their loans than they would under current rules.

Big Number

42.5 million. That’s the number of borrowers with outstanding federal student loan debt as of the second quarter of 2025, according to the Department of Education.

Key Background

Student loan debt has become a key political issue over the past few years, as Democrats have fought for loan forgiveness and the Biden administration sought to provide sweeping debt relief, only to have Republicans challenge it in court and the Supreme Court strike it down. While the Biden administration still made numerous piecemeal moves to forgive Americans’ debt, the Trump administration has not followed suit, with Education Secretary Linda McMahon saying in April that “American taxpayers will no longer be forced to serve as collateral for irresponsible student loan policies.” Trump has ordered the student loan portfolio to move under the Small Business Administration as he seeks to abolish the Department of Education, and he has also sought to restrict loan forgiveness for public servants so that it excludes employees working at organizations opposed to his policy agenda. Most notably, the Trump administration resumed debt collections May 5 for borrowers who have defaulted on their student loans, after collections had been on pause since the COVID-19 pandemic. The move is expected to impact millions of borrowers who haven’t paid their loans for approximately nine months, and the Trump administration intends to garnish a portion of workers’ wages if their loans remain unpaid.

Further Reading

Forbes House Passes Trump’s Signature Spending Bill, Meeting July 4 Deadline

Forbes Trump’s Presidency And Student Loans: What Move To Small Business Administration Means For Borrowers

Forbes Trump Resumes Defaulted Student Loan Collections Today—Impacting Millions Of Borrowers. Here’s What To Know.

Forbes GOP Will Extend Student Loan Forgiveness Tax Relief, But Only Narrowly