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.

Changes Impacting All Students

• Annual loan limits will be prorated for students enrolled in a less-than-full-time status. 
  • Undergraduate students enrolled in less than 12 credits and Graduate students enrolled in less than 8 credits will receive prorated annual loan limits.

Graduate Students

• Graduate PLUS Loans have been eliminated for new borrowers.
  • Existing borrowers may retain eligibility(legacy/grandfathering in) for up to 3 academic years or for the remainder of their program, whichever is shorter.
• Updated Limits
  • Graduate programs:
    • Up to $20,500/year, depending on enrollment intensity, with a $100,000 lifetime borrowing limit.
  • Lifetime limits for graduate unsubsidized loans do not include amounts borrowed as an
    undergraduate.

Undergraduate Students and Parent PLUS Loans

• 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.

Legacy provision (grandfathering)

You may continue to borrow under the current rules (including Graduate PLUS loans up to the Cost of Attendance) for up to three additional years if you meet BOTH of the following criteria:

1. You are enrolled in the same credentialed program in 2026–27 that you were enrolled in prior to July 1, 2026.
2. You borrowed a federal student loan (Subsidized, Unsubsidized, or PLUS) for that specific program, and the loan was disbursed before July 1, 2026.
   1. Parent PLUS: Parents who have already borrowed a Parent PLUS Loan before July 1, 2026 for that specific program, or students who already borrowed a Direct Loan prior to July 1, 2026, will still be able to borrow according to current rules - even if they didn’t borrow that exact type of loan previously.

If you change programs or start a new degree after July 1, 2026, you will be subject to the new limits.

Other Major Changes

• Current students who take academic leave, withdraw, or change programs will be subject to new loan limits upon return and will lose any previously established eligibility.
• No student may borrow more than 50% of their annual loan limit during the Fall semester.
• Sets the lifetime borrowing limit on all federal student loans, excluding Parent PLUS Loans received as a student, to $257,500 (up to $57,500 undergraduate, $100,000 Graduate, and $100,000 Professional Programs). Lifetime loan limits will vary by level of study and student status. 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.
• 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

Professional students may be eligible for up to $50,000 per year in Direct Unsubsidized Loans, with an aggregate limit of $200,000. The Department of Education will announce proposed definitions for "professional degree" programs that were previously unclear.

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