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The One Big Beautiful Bill Act (OB3 or OBBBA) was signed into law on July 4, 2025, and will take effect on July 1, 2026. The significant changes will impact the federal financial aid programs of both undergraduate and graduate students, including new loan limits, new loan repayment options, and updated eligibility requirements, for both current and future students. 

Elimination of Graduate PLUS loans

• The PLUS loan program for graduate students ends on July 1, 2026, except if the student qualifies for the Limited exception.
• New borrowing limits

Federal loans are now capped across a borrower’s lifetime:

• Graduate students:
  • Up to $20,500 per year based on enrollment intensity
  • $100,000 lifetime cap (not including undergraduate loans)

Students can read additional information on the .

• Parent PLUS loans:
  • $20,000 per year
  • $65,000 lifetime per student

and can visit the appropriate pages for additional information.

• Universal lifetime maximum: $257,500 across all federal loans combined

Student loan eligibility will be prorated based on enrollment intensity, similar to Pell grant and will apply to all student loan borrowers.
Example: 
A dependent freshman has a maximum annual loan limit of $5,500. This amount is split evenly between Fall and Spring semesters, or $2,750 per semester if full time.
Loan eligibility each semester is based on enrollment intensity at the time of disbursement.
Students enroll in 9 credits in the Fall, their loan eligibility is calculated as follows:

• Fall semester loan amount: $2,750
• Enrollment level: 75% (9 credits)
• Eligible loan amount: $2,062.50

Course Withdrawals and Loan Adjustments

Withdrawals Prior to Disbursement

• If a student withdraws from a course before loan disbursement, the loan amount will be recalculated based on the remaining enrolled credits.

Withdrawals After Disbursement

• If a student withdraws from courses after loan disbursement and their enrollment falls below 12 credits, the withdrawn credits will be applied as a reduction to Spring semester loan eligibility.

Repayment plans consolidated

For students who take out new loans in the 2026-2027 academic year and later will have just two repayment options:

• 1. Tiered Standard Repayment – fixed monthly payments ranging from 10 – 25 years depending on amount borrowed.
• 2. Repayment Assistance Plan (RAP) – a new plan based on borrower’s adjusted gross income. Loan forgiveness after 30 years (360 payments) or through the Public Service Loan Forgiveness Program.

Students with full merit funding:

• Students whose Cost of Attendance (COA) is fully covered by non-federal aid will no longer be eligible for a Federal Pell Grant.
  • Previously the provision allowed total financial aid including Pell Grant to exceed a student’s Cost of Attendance.
  • Example: A Pell-eligible student with a scholarship covering the full Cost of Attendance will no longer receive both the scholarship and the Pell Grant

Students with a high Student Aid Index (SAI):

• Students with an SAI greater than twice the maximum Pell Grant amount will be ineligible for any Pell Grant

Example: If the max Pell Grant is $7,395, students with an SAI over $14,790 will not qualify