One Big Beautiful Bill Updates

Please note that federal regulations implementing the One Big Beautiful Bill Act (OB3) have been finalized. Additional guidance from the Department of Education may continue to be released. All information below is subject to change and is provided for informational purposes only.

The One Big Beautiful Bill Act (OB3) was signed into law in July 2025 and includes significant changes to federal financial aid. You can view the published legislation here: view the full text of the OB3.

Federal Aid Changes

The following updates apply to both undergraduate and graduate/professional borrowers starting in the 2026–2027 academic year: 

• New Lifetime Borrowing Cap: A federal lifetime borrowing limit of $257,500 applies to the total amount a student may borrow in federal Direct Loans, including Graduate PLUS loans. This limit does not include Parent PLUS loans borrowed by a parent on behalf of a dependent student.
• Loan Proration for Less Than Full-Time Enrollment: Annual loan limits must be prorated based on "enrollment intensity".
  • If you are enrolled half-time, you may only be eligible for 50% of your typical annual loan limit.
  • Enrollment Intensity (%) = (Actual credit hours enrolled ÷ Full-time credit hours) × 100, rounded to the nearest whole percent.
  • This adjustment affects the maximum annual loan eligibility, and other federal proration rules may still apply separately.
• Streamlined Repayment Options: Most existing income-driven repayment (IDR) plans (e.g., SAVE, PAYE) are being phased out for new borrowers.
  • New Plans: Borrowers will primarily choose between a revised Standard Plan and the new Repayment Assistance Plan (RAP).
  • Borrowers currently in older plans may be required to transition in the future. Additional federal guidance is expected.
  • Important: Payments made under RAP do not count toward forgiveness timelines under Income-Based Repayment (IBR) if a borrower switches between plans.

 Loan Program Updates

• Student Loan Limits: Base annual and aggregate limits for undergraduate Subsidized and Unsubsidized loans remain unchanged. Graduate PLUS loans are now included in the in the $257,500 lifetime cap.
• Parent PLUS Hard Caps: Parent borrowing is no longer unlimited up to the full cost of attendance but now capped:
  • Annual Limit: $20,000 per dependent student per academic year.
  • Aggregate Limit: $65,000 lifetime limit per dependent student.
• Graduate PLUS Loans: Graduate PLUS loans remain available under current regulations; however, they are now included in the lifetime borrowing cap. Future federal changes may impact this program.
• Unsubsidized Loan Caps:
  • Standard Graduate Programs: Annual limit of $20,500; aggregate limit of $100,000 proposed/subject to change.

The "Legacy Provision" (Grandfathering)

Students or parents who borrowed federal loans for their current program before July 1, 2026, may continue under previous rules for a limited time:

• Applies only if the the student remains in the same program of study.
• Changing programs may result in loss of eligibility for prior loan benefits.
• Typically available for up to three additional academic years or until graduation, whichever comes first. 

Additional Updates

• Loan Rehabilitation Changes Beginning July 1, 2026:
  • Borrowers may rehabilitate a defaulted loan twice (previously once).
  • Incomplete rehabilitation attempts do not count toward the limit.
  • Borrowers may request an income-driven repayment plan during rehabilitation through a single application process.
• Parent PLUS and Transfer Students:
  • If a student transfers to a different institution, Parent PLUS borrowers will be subject to a new annual and aggregate limits, even if the transfer is part of an articulation agreement.

Pell Grant Restrictions

Students receiving non-federal scholarships that cover their Cost of Attendance are no longer eligible to receive the Pell Grant.