Important Notice: The One Big Beautiful Bill Act (OB3) law includes significant changes to federal student loans, borrowing limits, and repayment options. Many of these provisions require additional federal regulations before they can be fully implemented. The U. S. Department of Education is currently completing that process through negotiated rulemaking. Most OB3 financial aid changes are scheduled to take effect on July 1, 2026 unless otherwise noted. Some provisions have different effective dates, which will be clearly identified on this page.

Because the federal rulemaking process is ongoing (Public Comment is now closed), details may continue to evolve. This page will be updated as new information becomes available.

Changes to Federal PLUS Loans

Parent PLUS Loans

Parent PLUS loans will continue to be available, but with new statutory limits:

  • New Annual Limit: Parents may borrow up to $20,000 per student, per year.
  • New Lifetime Limit: Parents may borrow up to a total of $65,000 per student.

Note: Previously, Parent PLUS loans were limited only by the Cost of Attendance. Families needing more than these limits may need to explore private loan options.

New Annual & Lifetime Borrowing Caps

The OB3 Act introduces new annual and aggregate limits for federal student borrowing:
Borrower Type Annual Limit Lifetime Limit
Undergraduate $5,500 - $12,500 $31,000 - $57,500
Parent PLUS* $20,000 per student* $65,000 per student*
Graduate* $20,500* $100,000*
Total Lifetime Cap N/A $257,500*

The $257,500 cap includes all undergraduate, graduate, and professional loans combined, even if they have been repaid or forgiven.

Legacy Protections* (Grandfathering)

If you have a disbursed federal loan before July 1, 2026, you may qualify for legacy protection to continue borrowing under current rules. To qualify, you must:

  • Be enrolled in your program as of June 30, 2026.
  • Have received at least one Federal Direct Loan disbursement for that program.
  • Maintain continuous enrollment (Legacy protection ends if you withdraw or transfer).

Part-Time Enrollment Reductions

Starting in the 2026-2027 award year, your Annual Loan Limit will be reduced proportionally if you are enrolled less than full-time (24 credits annually).

Example: If you take 9 credits (75% of full-time), you are only eligible for 75% of your total annual loan amount. You must still be registered at least half-time in a given semester to receive loans for that semester.

Part-Time Enrollment Reductions
Registered Fall Credits Registered Winter Credits Percentage of Enrollment Annual Loan Eligibility Final Annual Loan Amount
12 12 24/24=100% $5,500 $5,500
9 9 18/24=75% $5,500 $4,125
6 6 12/24=50% $5,500 $2,750
3 3 6/24=25% $5,500 $0

Example 1: Enrolled 12 hours Fall 26
Disbursed 1,750.00 Subsidized loan
Drops one class (3 credit hours)
Actually earns aid for 9 credit hours $ 1,312.00
1,750.00 - 1,312.00 = $ 438.00

Example 2: Enrolled in 9 hours Winter 27
Eligible for $ 1,313.00
Student received $ 438.00 in Fall (not earned due to a dropped course) $ 1,313.00 - $ 438.00 =$ 875.00

Who this applies to:

These proportional loan adjustments apply to:

  1. All undergraduate borrowers. (Legacy Provisions (Grandfathering) do not apply).
  2. Parent PLUS Loans are not subject to the above pro-rations. (other rules are applicable)

Simplified Repayment Plans

For loans made on or after July 1, 2026, repayment will be simplified into two main options:

  1. Tiered Standard Repayment Plan: Fixed payments over 10–25 years based on your total balance.
  2. Repayment Assistance Plan (RAP): Income-based payments (1%–10% of income) with a $10 minimum. Remaining balances are forgiven after 30 years.