One Big Beautiful Bill Act (OBBBA):
What you Need to Know:
The One Big Beautiful Bill Act (OBBBA), signed into law on July 4, 2025, introduces significant updates to federal financial aid and student loan programs. Most changes will take effect beginning July 1, 2026, impacting students enrolling in the 2026–27 academic year and beyond.
This page provides a summary of what we know at this time and how these changes may affect you. The information on this page is provided to help students and families navigate and prepare for the changes to federal student aid programs; however, federal guidance is still being released. All details are subject to change as additional regulations and implementation guidance become available.
Changes to Loan Eligibility Based onÌýEnrollmentÌý
Under OBBBA, federal student loan eligibility will be more closely tied to a student’s enrollment level. Schools will be required to prorate loan amounts based on whether a student is enrolled full-time or part-time.
- Students enrolled full-time (12 or more credits) in a semester may be eligible for up to 50% of their annual loan limit for that term.
- Students enrolled half-time (e.g., 6 credits) may be eligible for approximately 25% of their annual loan limit.
These changes are intended to better align borrowing with actual educational costs and enrollment intensity. Students attending less than full-time should plan for reduced loan eligibility compared to previous years.
Federal Parent PLUS Loan Changes
New Borrowers (Beginning July 1, 2026)
Parents who borrow their first Parent PLUS Loan on or afterÌýJuly 1, 2026, will be considered NEW borrowers. These borrowers will be subject to updated Parent PLUS Loan borrowing limits.
- $20,000 annual limit per dependent student (combined across all parents)
- $65,000 lifetime (aggregate) limit per dependent student
These limits apply regardless of prior repayment, forgiveness, or discharge amounts.
Current Borrowers (Before July 1, 2026)
Parents who previously borrowed a Parent PLUS Loan for a student:
- May continue borrowing under current rules for up to three academic years, or
- For the remaining time the student is enrolled in the same academic program, whichever is shorter
This provides a temporary transition period for families already using Parent PLUS Loans.
ÌýFederal Student Loan Program Updates
- A new lifetime borrowing cap of $257,500 will apply to most federal student loans (excluding Parent PLUS, Graduate PLUS, consolidation loans, and certain health profession loans).
- Graduate PLUS Loans will be eliminated, reducing the ability for graduate and professional students to borrow up to the full cost of attendance.
Repayment Updates
The legislation simplifies repayment options while changing long-term repayment structures:
- Borrowers will choose between a standard repayment plan or a new income-based Repayment Assistance Plan (RAP).
- Monthly payments under RAP are based on income, with repayment periods extending up to 30 years.
- Several existing income-driven repayment plans will be phased out or limited.
- Borrowers currently using certain loan types (such as Parent PLUS loans) may need to take action before June 30, 2026, to retain specific repayment benefits.
Changes to Grants and Financial Aid
OBBBA also updates eligibility and distribution of federal aid:
- Pell Grants may expand to include certain workforce and short-term training programs.
- Aid eligibility will more closely reflect enrollment status (full-time vs. part-time).
- Students whose full cost of attendance is already covered by other aid may see adjustments in Pell Grant eligibility.
These changes are designed to simplify the financial aid system and encourage responsible borrowing. However, they may also:
- Limit the total amount students and families can borrow through federal programs.
- Increase the importance of exploring scholarships, grants, and lower-cost education options.
The information provided above reflects our current understanding of federal financial aid changes under the One Big Beautiful Bill Act (OBBBA) and is not intended to be legal advice. Many specifics—including transition rules, eligibility criteria, and implementation timelines—are still subject to federal rulemaking and guidance from the U.S. Department of Education. Policies, processes, and the guidance in this document are subject to change as new details emerge.
For the most recent published guidance, please visit the federal resources atÌý and