Student loan changes are here; Ohio’s average student loan debt is about $35,000

Ohioans will see changes to student loans as a result of the Trump administration’s One Big Beautiful Bill. 

A handful of policy changes for student financial aid borrowing and repayment took effect Wednesday, one year after President Donald Trump signed the massive bill into law. 

“We’re already facing a huge affordability crisis, and folks are already saddled with so much debt that isn’t just student loan debt,” said Amy Czulada, senior advisor for outreach & engagement for Protect Borrowers. 

“Folks are just really being pinched at every level. … We’re really concerned about what’s coming down the pike here, because of the One Big Beautiful Bill, but also all these other things that are happening simultaneously.” 

About 1.78 million student borrowers live in Ohio and the average student loan debt is $35,072, according to the Education Data Initiative. 

Nearly half of Ohio’s borrowers are younger than 35 and 15% of Ohio residents have student loan debt, according to the data. About a fifth of Ohio borrowers owe between $20,000 to $40,000, according to the data. 

Borrowing

The changes creates loan limits for borrowers, capping the amount of money graduate students can borrow. 

Graduate students were previously able to borrow enough money to pay the cost of their program, but those loans are being phased out. 

Graduate students earning “professional” degrees are limited to borrowing $50,000 per year and a lifetime total of $200,000. These degrees include chiropractic, clinical psychology, dentistry, law, medicine, optometry, osteopathic medicine, pharmacy, podiatry, theology. and veterinary medicine.

All other graduate programs will have a cap of $20,500 per year and $100,000 total. 

“It’ll end up with folks either not being able to go back to school or needing to wait to go back to school until they can save enough money to go back to school,” Czulada said.

Private student loans are an option for borrowers, but she cautions people do their research beforehand.

“Private student loans have all sorts of issues associated with them, including higher interest rates and no cancellation programs,” Czulada said. “It’s much more of an opaque market, so they end up being a lot riskier and costing folks a lot more money.” 

Parent PLUS loans will also be capped at $20,000 per year, per dependent child, with a total cap of $65,000 per dependent. 

Repayment

New student loan borrowers will only have access to two repayment plans — a new tiered standard plan and a repayment assistance plan.  

“The new tiered standard plan is based on how much of a loan balance you have,” Czulada said. “So it’ll keep people in debt a lot longer based on their loan balance, and have higher bills associated with that.”

The new repayment assistance plan is based on a borrower’s adjusted gross income. It also comes with a $50 monthly reduction per dependent. 

The federal Saving on a Valuable Education (SAVE) program is being phased out, meaning more than 7 million people enrolled in the program will have to move their student debt to another plan. 

SAVE borrowers will have until September to switch plans and borrowers who don’t make the switch will be automatically enrolled in a standard federal repayment plan. 

The SAVE program came out of the Biden administration in 2023 and limited federal loan repayment to 5% of an undergraduate borrower’s disposable income. 

There are about 9 million student loan borrowers in default — meaning someone has gone more than nine months without making a payment — with $220 billion in outstanding federal student loan debt, according to the National Association of Student Financial Aid Administrators. 

Ohio has 428,740 student loan borrowers in default, according to Protect Borrowers. 

Follow Ohio Capital Journal Reporter Megan Henry on X or on Bluesky.