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One Big Beautiful Bill Updates

FAFSA Federal Updates for the “One Big Beautiful Bill."

Please note that while the law has passed and the regulations are effective July 1, 2026, final regulatory guidance has not yet been published by the Department of Education. All information below is subject to change as regulatory guidance is released and is for informational purposes only.

The One Big Beautiful Bill Act (OB3) was signed into law in July 2025, with notable impacts 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 universal federal borrowing limit of $257,500 now applies to the combined total of all undergraduate and graduate/professional loans.
  • Loan Proration for Part-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. (Give an example) Sophomore loan limit
  • 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).
    • Transition Deadline: Current borrowers on older IDR plans must switch to a new plan by July 1, 2028, or they will be automatically enrolled in RAP.

 

Loan Program Updates

  • Student Loan Limits: Base annual and aggregate limits for undergraduate Subsidized and Unsubsidized loans remain unchanged, but PLUS loans will now count toward the new $257,500 lifetime cap.
  • Parent PLUS Hard Caps: Parent borrowing is no longer unlimited up to the full cost of attendance but now has an annual and aggregate limit.
    • Annual Limit: $20,000 per dependent student per academic year.
    • Aggregate Limit: $65,000 lifetime limit per dependent student.
  • Phase-Out of Graduate PLUS Loans: The Graduate PLUS program is being eliminated for new borrowers.
  • Unsubsidized Loan Caps:
    • Standard Graduate Programs: Annual limit of $20,500; aggregate limit of $100,000.

The "Legacy Provision" (Grandfathering)

  • Students or parents who borrowed federal loans for their current programbefore July 1, 2026, may continue under the old rules (including Graduate PLUS and higher Parent PLUS limits) for up to three additional academic years or until graduation, whichever comes first. 

Pell Grant Restrictions

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

Frequently Asked Questions

What if I received a Parent PLUS loan last year? Can I still receive one this year?

Yes, parents are allowed to apply for the Parent Plus loan to assist with the student's remaining balance, with a maximum of the student’s Cost of Attendance or $20,000 each academic year.

What if I received a Grad PLUS loan last year? Can I still receive one this year?

If a student has an active Grad PLUS federal student loan that was disbursed before July 1st, 2026, while enrolled in a qualifying program, the borrower may continue borrowing if they are enrolled full-time in the same qualifying program.

What if I am only able to take 9 hours? Will I still be able to receive loans?

Yes, but the loan amount will be prorated according to the student’s enrollment intensity.

How long is forbearance allowed?

Currently, loan forbearance is allowed for up to 12 months at a time with a cumulative limit of 3 years. For loans originated on or after July 1st, 2027, it is allowed for up to 9 months in any two-year period.  

What changes are happening with deferments?

Economic hardship and unemployment deferments will be phased out. Borrowers with loans made on or before July 1st, 2027, may still utilize economic hardship and unemployment deferment options until those loans are paid in full.

To start the deferment process, visit our Registrar's office webpage.

Can I rehabilitate my defaulted loan status?

Yes. Before July 1st, 2026, you were only allowed to rehabilitate your defaulted loan once. Starting July 1st, 2026, you can rehabilitate your defaulted loan a second time.