The One Big Beautiful Bill Act (H.R.1) was signed into law on July 4, 2025. The legislation introduces significant changes to federal Title IV student aid programs.
The information provided on this page is subject to change while we await final regulations and Department of Education guidance regarding the implementation of the new rules. Please review this page for updates as we continue to prepare for the upcoming changes.
The changes to the federal financial aid programs will affect all students. This includes incoming and continuing students at the undergraduate, graduate, and professional levels. It is important to stay informed and to ensure your sources of information are reliable.
Upcoming Changes - A Quick Overview
- Loan reduction for less than full-time enrollment.
- New annual and lifetime loan limit for new borrowers.
- Elimination of the Federal Graduate Plus Loan.
- Legacy Borrower Status for students enrolled in an eligible program of study who had a Federal Direct Loan disbursed prior to June 30, 2026.
- Restricting Pell Awards for students who receive non-federal aid equal to their Cost of Attendance.
- Changes to Federal Direct Loan repayment programs.
Resources
Click here for the Full Legislation Text
Click here for Department of Education Updates
Click here for A Brief Overview of OBBBA Loan Impacts - NASFAA
Click here for Changes to Federal Direct Loan Repayment Programs
Click here for the NASFAA OBBA Web Center
Loan Recalculation for Less than Full-Time Enrollment
Requires institutions to prorate annual loan amounts for less than full-time enrollment during an academic year.
Loan Recalculation applies to all loans except Parent Plus Loans and is a required calculation regardless of a student’s legacy borrower status.
Students who intend to borrow Federal Direct Loans to help fund their education costs should carefully consider enrollment plans for the full academic year and limit dropping courses after their aid has disbursed. Changes in enrollment after aid has been disbursed may adversely impact loan eligibility for the remainder of an academic year.
Federal Loan Program Lifetime Loan Limits
Legacy Provision: 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 at full time enrollment, whichever is less. The legacy provision does not continue if there is a break in enrollment.
Students who continue borrowing after the legacy period ends will be subject to the new loan limits.
| Borrower Type | Lifetime Loan Limit |
| New Borrowers as of 7/1/2026 | $257,500 combined borrowing (undergraduate, master's, doctorate) Includes all amounts borrowed at the undergraduate, graduate, and professional levels Excludes: Parent and grad PLUS loans Consolidation loans HEAL/Health Professions loans |
| Legacy Borrowers | $138,500 for undergraduate & graduate subsidized/unsubsidized |
Federal Parent PLUS Loans
Click here for Current Parent Borrowers, an overview - NASFAA
Click here for New Parent Borrowers, an overview - NASFAA
Legacy Provision: If a borrower has a Federal Direct Loan made before July 1, 2026, while the dependent student is enrolled in a credentialed program, the parent borrower can continue to borrow under current loan limits for 3 academic years or the remainder of their expected time to credential at full-time enrollment, whichever is less. The legacy provision does not continue after a break in enrollment.
For Parent Plus Loan Borrowers - The legacy provision is determined by the student the parent is borrowing for.
Parents who continue borrowing after the legacy period ends will be subject to the new Plus Loan limits.
Parent PLUS Changes to Loan Limits
| Borrower Type | Annual Loan Limits | Aggregate Loan Limits |
| New Borrowers as of 7/1/2026 | $20,000 per year per dependent student | $65,000 per dependent student Includes all amounts borrowed, including those that have been repaid, forgiven, or otherwise discharged. |
| Legacy Borrowers | Up to the student's Cost of Attendance | Based on parent credit approval |
Federal Graduate Loans
Click here for Graduate Student Borrowers, an overview - NASFAA
Click here for Professional Graduate Student Borrowers, an overview - NASFAA
Legacy Provision: 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 from the Grad PLUS program for 3 academic years or the remainder of their expected time to credential at full-time enrollment, whichever is less. The legacy provision does not continue after a break in enrollment.
Students who continue borrowing after the grandfathering period ends will be subject to the new loan limits.
Graduate PLUS Changes to Loan Limits
| Borrower Type | Annual Loan Limits | Aggregate Loan Limits |
| New Borrowers as of 7/1/2026 | $0 - OBBA eliminates the Graduate PLUS program | $0 |
| Legacy Borrowers | Up to the student's Cost of Attendance | based on student credit approval |
Graduate Unsubsidized Loan
| Borrower Type | Annual Loan Limits | Aggregate Loan Limits |
| New Borrowers as of 7/1/2026 | $20,500 for graduate students $50,000 for professional* graduate students | $100,000 for graduate students $200,000 for professional* graduate students |
| Legacy Borrowers | $20,500 for all graduate-level students | $138,500 for all graduate-level students |
*A professional student is a student enrolled in a program of study that awards a professional degree, as defined under section 34 CFR 668.2. Examples of a professional degrees include but are not limited to Pharmacy (Pharm.D.), Dentistry (D.D.S. or D.M.D.), Veterinary Medicine (D.V.M.), Chiropractic (D.C. or D.C.M.), Law (L.L.B. or J.D.), Medicine (M.D.), Optometry (O.D.), Osteopathic Medicine (D.O.), Podiatry (D.P.M., D.P., or Pod.D.), and Theology (M.Div., or M.H.L.).
Graduate and professional student borrowers who DO NOT qualify for grandfathering will not have undergraduate subsidized and unsubsidized loans counted toward their graduate or professional aggregate loan limits.
For graduate students who were previously professional students, loans taken as a professional student will count toward the $100,000 graduate aggregate loan limit.
For professional students who were previously graduate students, loans taken as a graduate student will count toward the $200,000 professional aggregate loan limit.
Pell Grant Eligibility Changes
| Area of Impact | Change Explanation |
| Full Cost of Attendance Scholarships/Grants | Students who receive grants or scholarships from non-federal sources that cover their entire Cost of Attendance are ineligible to receive a Pell Grant, even if eligible for the program. |
