The One Big Beautiful Bill Act (OBBB/OB3), passed by Congress and signed into law on July 4, 2025, contained several provisions impacting federal student loans. These updates are highlighted below. Additional details will be added to this site in the coming months. Unless otherwise noted, these changes will be effective July 1, 2026.

There are no changes to financial aid for the 2025–26 academic year, stemming from this legislation.

Information is routinely becoming available and is subject to change.

  • Graduate PLUS Loans have been eliminated for new borrowers. Existing borrowers may retain eligibility for up to three academic years or the remainder of their program, whichever is less.
  • Annual loan amounts must be prorated for students enrolled in a less-than-half-time status. An effective date for this provision has not yet been determined.
  • Sets the lifetime borrowing limit on all federal student loans, excluding Parent PLUS Loans received as a student, to $257,500. Lifetime loan limits will vary depending on the level of study.
  • Several changes were made to loan repayment options, including the creation of a new standard repayment plan and a new income-based repayment plan (RAP). Several existing plans will be eliminated on July 1, 2028. For more information, please visit studentaid.gov

Undergraduate Limits and Parent PLUS Loans

  • There are no changes to undergraduate loans, although they will count towards the new lifetime limits.
  • Parent PLUS loans will be capped at $20,000 per student per year, with a $65,000 lifetime limit per dependent student.
  • Existing Parent PLUS borrowers who have borrowed for their students before July 1, 2026, can continue with the current limits for three more years or until the student’s program ends.

New Graduate Unsubsidized Direct Loan Limits (effective July 1, 2026)

  • Professional programs (e.g., medicine, law):
    • Up to $50,000/year, $200,000 lifetime borrowing limit.
  • Other graduate programs:
    • Up to $20,500/year, $100,000 lifetime borrowing limit.
  • Professional students may be eligible for up to $50,000 per year in Direct Unsubsidized Loans, with an aggregate limit of $200,000.
  • Existing Unsubsidized loan borrowers can access Unsubsidized loans under the current limits until they complete their current program or for three additional years, whichever is less.