What Is the OBBBA?
The One Big Beautiful Bill Act (OBBBA) was enacted and took effect on July 1, 2026. The law introduces several changes to federal student aid, affecting how students and families access and repay federal education loans.
We understand that these updates may raise questions, and we are committed to helping students and families navigate the new requirements.
The information provided below reflects the most recent federal guidance currently available. As additional regulations and implementation details are released, this information may be revised and updated accordingly.
Overview
Undergraduate Student Loan Eligibility
Federal Direct Subsidized and Unsubsidized Loan borrowing limits for undergraduate students remain unchanged under the OBBBA. Students borrowing these loans will continue to be subject to the same annual and aggregate limits that existed prior to the new legislation.
Parent PLUS Loan Changes
Beginning July 1, 2026, new Parent PLUS Loan borrowers will be subject to the following borrowing caps:
- Maximum annual borrowing limit: $20,000
- Maximum lifetime borrowing limit: $65,000 per dependent student
Graduate and Professional Student Loan Eligibility
Graduate and professional students who begin their programs on or after July 1, 2026, will no longer have access to the Federal Direct Graduate PLUS Loan Program, which has been discontinued for new borrowers.
Federal Direct Unsubsidized Loan Limits
Graduate Students
Effective July 1, 2026:
- Annual borrowing limit: $20,500
- Aggregate borrowing limit: $100,000
This aggregate cap excludes previously borrowed Graduate PLUS Loans and any undergraduate federal loan debt.
Professional Students
Students enrolled in a professional program may borrow:
- Up to $50,000 per year
- Up to $200,000 in total
The aggregate limit includes graduate-level borrowing but excludes prior Graduate PLUS Loans and undergraduate loans.
New Overall Federal Loan Cap
Starting July 1, 2026, borrowers will be subject to a new cumulative federal student loan limit of $257,500 across all levels of study. Parent PLUS Loans are not included in this total.
Additional Provisions
Legacy Borrowing Rules
Certain current students who received federal loans before July 1, 2026, may qualify for transitional (“legacy”) protections.
Eligible students may retain their previous borrowing limits for up to:
- Three years, or
- The remaining published length of their academic program, whichever period is shorter.
However, eligibility may be affected by circumstances such as:
- Taking a leave of absence
- Interrupting enrollment
- Falling below full-time status
- Changing academic programs
Proration for Part-Time Enrollment
OBBBA introduces a Schedule of Reduction that lowers the amount students may borrow when enrolled less than full time.
Loan eligibility may be influenced by:
- Enrollment status each term
- Number of credit hours attempted
- Number of credit hours successfully completed
These factors may affect loan awards in both current and future enrollment periods. Additional details are available in the FAQ section.
Repayment Plan Updates
Federal student loan repayment options will gradually be reduced to two primary choices:
- Standard Repayment Plan
- Repayment Assistance Plan (RAP)
The RAP program is expected to replace existing income-driven repayment options, including SAVE and PAYE, by July 1, 2028.
Comparison of Federal Student Loan Limits
Federal Student Loan Limits Comparison Chart for Reference
Category of Borrower | Loan Limits Under Previous Law | Loan Limits Under OBBBA (effective 7/1/2026) |
|---|---|---|
Undergraduate Dependent Student | Direct Subsidized and Unsubsidized Loans up to $5,500-$7,500 annual limit depending on academic level, $31,000 lifetime limit | Direct Subsidized and Unsubsidized Loans unchanged. |
Undergraduate Independent Student | Direct Subsidized and Unsubsidized Loans up to $9,500-$12,500 annual limit depending on academic level, $57,500 lifetime limit | Direct Subsidized and Unsubsidized Loans unchanged. |
Parent of Undergraduate Student | Direct Parent PLUS Loan up to cost of attendance annual limit, no lifetime limit | Direct Parent PLUS Loan up to $20,000 annual limit, $65,000 lifetime limit per student |
Graduate Student | Direct Unsubsidized Loan up to $20,500 annual limit, $138,500 lifetime limit (including any undergraduate borrowing) Direct Grad PLUS Loan up to cost of attendance annual limit, no lifetime limit | Direct Unsubsidized Loan up to $20,500 annual limit, $100,000 aggregate limit (does not include previously borrowed Grad PLUS or any undergraduate borrowing) Direct Grad PLUS Loan program eliminated |
Professional Student | Direct Unsubsidized Loan up to $20,500 annual limit, $138,500 lifetime limit (including any undergraduate and graduate borrowing) Direct Grad PLUS Loan up to cost of attendance annual limit, no lifetime limit | Direct Unsubsidized Loan up to $50,000 annual limit, $200,000 aggregate limit (including any graduate borrowing and excluding any previously borrowed Grad PLUS) Direct Grad PLUS Loan program eliminated |