Certain provisions in the Reconciliation Bill are effective upon enactment.
By Rick Cox
The Department of Education issued Dear Colleague Letter GEN-25-04 on July 18, 2025, to provide information on certain provisions in the bill. Most of the provisions in the act will become effective July 1, 2026. However, several are effective upon the bill’s enactment and those are discussed in this Dear Colleague Letter and summarized below:
- The bill eliminates the requirement that borrowers have a partial hardship to qualify for enrollment in an income-based repayment plan.
- The bill allows borrowers with a consolidation loan that repaid a Parent PLUS Loan to enroll in an income-based repayment plan.
- The bill reduces the amount a student may borrow if the student is attending less than full-time. This reduction will be in direct proportion to the degree to which the student is not enrolled full-time, rounded to the nearest percentage point. The department is currently working on the schedule of reductions, and colleges will start using this schedule to reduce loans beginning with the 2026-2027 award year.
- The bill amends PSLF to allow for payments made under the newly created Repayment Assistance Plan (RAP) to count toward loan forgiveness.
- The bill delays the implementation of the 2022 regulations pertaining to Borrower Defense to Repayment until July 1, 2035. We will now revert to the regulations that were effective July 1, 2020.
- The bill delays the implementation of the 2022 regulations pertaining to closed school loan discharges until July 1, 2035. We will revert to the regulations that were effective July 1, 2020.
The department will continue to provide guidance and updates related to provisions in this bill that impact Title IV programs. We will continue to keep you informed as new information is provided.
You can access the DCL here.
Rick Cox is Global’s Executive Director of Regulatory Affairs and Compliance.
July 22, 2025
For more information on topics affecting federal student financial aid, please visit our blog page.