Better known as the One Big Beautiful Bill Act

The One Big Beautiful Bill Act (OBBBA) was passed by Congress and signed into law on July 4, 2025. The legislation includes significant changes to federal student aid programs affecting undergraduate, graduate, and professional students.

Most changes took effect July 1, 2026, for the 2026-2027 academic year. Student Financial Aid is awaiting final rules and guidance from the Department of Education and will continue to update this page as more information becomes available.

Undergraduate Students

Federal Pell Grant

• Students are not eligible for a Pell Grant if their Student Aid Index (SAI) exceeds twice the maximum Pell Grant Award ($7,395 for the 2026-2027 academic year).

Federal Direct Loans

• There are no changes to annual or aggregate federal loan borrowing limits for undergraduate students.
• Students enrolled less-than-full-time (12 hours undergraduate, 8 hours graduate) will have their subsidized and unsubsidized loans prorated based on annual credit hours.

Parent PLUS Loan

New Parent PLUS borrowers will be subject to the following limits:

• Annual limit: $20,000 per dependent student
• Lifetime limit: $65,000 for each dependent student

These limits apply per student, regardless of the number of parents borrowing. For example, two parents borrowing for the same student are still capped at $20,000 total for the academic year.

Legacy provision: Parent PLUS borrowers are not subject to the new PLUS loan limits if they either borrowed a PLUS loan for a student prior to July 1, 2026 and the student remains enrolled in the same program, or if the student had a Direct Loan (subsidized or unsubsidized) for the same program before July 1, 2026. Parent borrowers can continue to borrow up to the student’s COA, minus other aid, for up to three academic years or until the student completes their degree, whichever occurs first, provided that the student remains continuously enrolled in the same program.

Students whose parents have reached the $65,000 lifetime limit are not eligible to borrow additional funds under independent undergraduate student limits.

Graduate/Professional Students

Federal Direct Unsubsidized Loan Limits

Graduate Students

• Annual limit: $20,500 (no change)
• Aggregate limit: $100,000 (Undergraduate loans are not included in this limit.)

Professional Students

• Annual limit: $20,500
• Aggregate limit: $200,000 (Undergraduate loans are not included; graduate-level loans are included.)

If a borrower has a Federal Direct Loan made before July 1, 2026, while enrolled in a credentialed program, the borrower can continue to borrow under current loan limits for 3 academic years or the remainder of their expected time to credential, whichever is less.

Lifetime Federal Loan Limit

A combined lifetime federal loan limit of $257,500 applies across all levels of study, including undergraduate, graduate, and professional loans.

Federal Loan Proration for Less-Than-Full-Time Enrollment

Federal student loans for graduate and professional students will be prorated if enrolled less-than-full-time.

Federal Graduate PLUS Loan Changes

The Graduate PLUS Loan program will be eliminated for new borrowers beginning July 1, 2026.

Legacy provision: Students who borrowed a Federal Direct loan prior to July 1, 2026, may continue borrowing under current limits for up to three academic years or until program completion, whichever occurs first. However, if a graduate or professional student changes programs, they will lose eligibility for the Federal Graduate PLUS Loan. Example: If a graduate/professional student changes from Business Administration to Social Work, or a graduate student graduates from a Master’s program and enrolls in a Ph.D. or Ed.D. program, this student will lose Graduate PLUS Loan eligibility.

Repayment

Changes will apply to both new and continuing borrowers, including:

• A new tiered Standard Repayment Plan.
• A new income-driven Repayment Assistance Plan (RAP).
• Existing income-contingent repayment plans will sunset in 2028.

Parent PLUS & Consolidation Loan Rules

• All new Parent PLUS loans must use the Standard Repayment Plan and are ineligible for the Repayment Assistance Plan.
• Consolidation loans may use the Standard Repayment Plan or Repayment Assistance Plan.
• Current borrowers with no new loans made on or after July 1, 2026, are eligible to enroll in the current Standard, Graduated, Extended, or current Income Based (IBR) repayment plans and also may opt into the new RAP. Current borrowers may also switch between, enter or remain on existing Income Driven (IDR) plans until July 1, 2028.

Additional Information

Student Financial Aid will continue to post updates to this page as new federal guidance becomes available. You can also monitor announcements from the U.S. Department of Education at studentaid.gov.