ºÚÁÏÉçÇø

The One Big Beautiful Bill Act passed on July 4, 2025 brings many changes to federal student aid programs. Most of these changes are effective starting July 1, 2026 and will affect students for the 2026-27 school year. The Department of Education may also make further adjustments prior to July 1, 2026.

Am I a New or Active Borrower?

Because all of your federal loans must be repaid under the same repayment plan, your borrower status depends on when you took out your loans and whether any remain outstanding.

New Borrower

You are considered a new borrower if:

• You did not take out any federal loans before July 1, 2026; or
• You took out loans before July 1, 2026, but they have all been paid in full.

Active Borrower

You are considered an active borrower if:

• You were enrolled in a program of study as of June 30, 2026, and
• You received a Direct Loan for that same program before July 1, 2026, and that loan has not been fully repaid.

Legacy provisions apply to many of these loan changes. However, transferring to a different school, changing your major, or making other academic adjustments could impact your eligibility under those legacy provisions. We encourage you to contact our office to review how any changes to your academic plans may affect your loan eligibility.

Graduate Plus Loan Changes

Elimination of Graduate PLUS Loans

Effective July 1, 2026, the Graduate PLUS Loan Program has been discontinued entirely for all new borrowers. Graduate PLUS Loans currently allow graduate students to borrow up to the Cost of Attendance for their program.

Legacy Provision

If a student received a federal student loan that was disbursed before July 1, 2026, while enrolled in an eligible program, they may continue to borrow under the previous loan limits for up to three academic years or until they complete their program, whichever comes first.

Note: Changing programs, taking a leave of absence, or making other enrollment changes could affect eligibility under this legacy provision.

Loan Limits

Effective July 1, 2026, the One Big Beautiful Bill establishes a $257,500 aggregate lifetime limit on all federal student loans borrowed by a student. This total does not include Parent PLUS Loans, since those are borrowed by parents on behalf of the student.

Legacy Provision

Students who received a federal student loan disbursement before July 1, 2026, while enrolled in an eligible program of study, may continue borrowing under the current loan limits. This legacy eligibility remains in place for up to three academic years or until the student completes their eligible program, whichever occurs first.

Graduate & Professional Students

The loan limits below apply to student borrowers who are not considered active borrowers under the federal student loan program:

• Graduate Students: $20,500 annually; $100,000 aggregate
• Professional Students: $50,000 annually; $200,000 aggregate
• Combined Graduate/Professional Aggregate Limit: $200,000

Please note: Graduate and professional loan limits do not reset when starting a new degree or program. There is a combined lifetime aggregate limit of $200,000.

Legacy Provision

Students who received a federal student loan disbursement before July 1, 2026, while enrolled in an eligible program of study, may continue borrowing under the current loan limits. This legacy eligibility remains in effect for up to three academic years or until the student completes their eligible program, whichever occurs first.

Parent Plus Loan

Beginning July 1, 2026, Parent PLUS Loans will be limited to $20,000 per year with a $65,000 lifetime aggregate cap. Previously, Parent PLUS Loans were not capped and could be borrowed up to the student’s full Cost of Attendance.

These limits apply per dependent student. Parents with more than one dependent student may borrow up to the annual and aggregate limits for each student.

The limits are tied to the student, not the number of parent borrowers. Even if two parents choose to borrow on behalf of the same student, the combined total cannot exceed $20,000 per year or $65,000 overall for that student.

Legacy Provision

If a student has received a Parent PLUS Loan disbursement before July 1, 2026 while enrolled in a qualifying program, the parent borrower may continue borrowing Parent PLUS Loans under previous loan limits for three academic years or until the student completes their program, whichever is sooner.

Loan Prorations

Starting July 1, 2026, federal loan limits will be prorated based on a student’s enrollment level, similar to how grant aid is adjusted. This means that borrowers enrolled less than full time may only borrow amounts proportional to their credit load, and must be enrolled at least half-time to qualify.

We anticipate additional guidance from the Department of Education regarding the specific proration calculations.

Pell Grant Eligibility Changes

The following Pell Grant changes take effect July 1, 2026:

• Students whose scholarships, waivers, or other gift aid fully cover their Cost of Attendance will no longer be eligible to receive a Pell Grant. Under prior regulations, some students could receive a Pell Grant even if their scholarship aid fully covered their costs.
• Students with a Student Aid Index (SAI) equal to or greater than twice the maximum Pell Grant award ($7,395) will not qualify for Pell. For example, based on the 2024–25 maximum award, this would mean an SAI of $14,790 or higher would make a student ineligible.