One Big Beautiful Bill Act Updates
The One Big Beautiful Bill Act (OBBBA) was signed into law on July 4, 2025. The Bill included several changes to student financial aid, scheduled to become effective on July 1, 2026. The purpose of this page is to provide our students with information regarding what those changes are, to the best of our ability.
The Department of Education is currently working through plans for implementing the changes, as well as providing final federal regulations and guidance for how federal financial aid programs will be managed. We will update this page as additional information becomes available and acknowledge that the information we are sharing is subject to change.
The new rules are expected to become effective on July 1, 2026. Any student who begins a new degree program on or after this date will be subject to the new rules and loan limits.
Grandfathering Criteria
Students who meet the following criteria on June 30, 2026, will be grandfathered under current student loan rules.
- Be enrolled in a program of study at an institution as of June 30, 2026, and
- A direct loan was made for that same program of study prior to July 1, 2026.
Students will retain grandfathered status until:
- Completion of the degree at the same institution, or
- A student will remain eligible for grandfathered status during the period of the student’s “expected time to credential.” This means the student will remain eligible for either 3 academic years, or the length of time the student is expected to complete degree requirements, whichever is shorter.
- Withdrawing, or otherwise ceasing enrollment at that institution.
The new regulations divide post-baccalaureate students into different categories. An important distinction between graduate students and professional students is provided in the proposed regulations.
A graduate student will be defined, for purposes of federal financial aid, as a student enrolled in a program of study that is above the baccalaureate level and awards a graduate credential upon completion of the program. Excluded from this definition are students who will receive a professional degree.
A professional student will be defined, for purposes of federal financial aid, as a student enrolled in a program of study that awards a professional degree upon completion of the program. Specific criteria for which programs qualify as a professional degree will be established in the regulations. Examples of degrees that are expected to be considered professional degrees are medical and law degrees.
| Borrower Type (Direct Loan Type) | Current/Grandfathered Limits (borrower level, dependency status) | New Limits Effective July 1, 2026 |
|---|---|---|
| Undergraduate (subsidized) | $3,500 (first-year, dependent or independent) $4,500 (second-year, dependent or independent) $5,500 (third-year and beyond, dependent or independent) | No Changes |
| Undergraduate (unsubsidized) | $5,500 minus subsidized loans (first-year, dependent) $6,500 minus subsidized loans (second-year, dependent) $7,500 minus subsidized loans (third-year and beyond, dependent) $9,500 minus subsidized loans (first-year, independent) $10,500 minus subsidized loans (second-year, independent) $12,500 minus subsidized loans (third-year and beyond, independent) | No Changes |
| Graduate student (unsubsidized) | $20,500 (in general; higher limits apply to certain health profession programs) | $20,500 |
| Professional student (unsubsidized) | $20,500 (in general; higher limits apply to certain health professions programs) | $50,000 |
| Graduate student / professional student (PLUS) | Up to Cost of Attendance (COA) minus Other Financial Assistance (OFA) | No new PLUS loans to graduate students or professional students |
| Parents of dependent undergraduates (PLUS) | Up to COA minus OFA | $20,000 per dependent student |
| Borrower Type (Direct Loan Type) | Current/Grandfathered Limits | New Limits Effective July 1, 2026 |
|---|---|---|
| Undergraduate (subsidized) | $23,000 (dependent or independent) | No Changes |
| Undergraduate (unsubsidized) | $31,000 minus subsidized loans (dependent student) $57,500 minus subsidized loans (independent student) | No Changes |
| Graduate student (unsubsidized) who is not and has not been a professional student) | N/A | $100,000 |
| Graduate student (unsubsidized) who is or was a professional student) | N/A | $200,000 minus amounts borrowed as a professional student |
| Professional Student (unsubsidized) who is not or was not a graduate student | N/A | $200,000 |
| Professional student (unsubsidized) who is or was a graduate student | N/A | $200,000 minus amounts borrowed as a graduate student |
| Combined undergraduate (subsidized & unsubsidized) + graduate/professional (unsubsidized) | $138,500 (in general; higher limits apply to certain health professions programs) $224,000 (students enrolled in certain health professions programs) | N/A |
| Graduate student / professional student (PLUS) | No limit | No new PLUS loans to graduate students and professional students |
| Parents of dependent undergraduates (PLUS) | No limit | $65,000 per dependent undergraduate student without regard to amounts paid / forgiven / discharged / canceled |
| Loan Type | Current/Grandfathered Limits | New Limits Effective July 1, 2026 |
|---|---|---|
| All Title IV Loans (Direct Loans, FFEL, Perkins, etc.) excluding PLUS Loans without regard to amounts paid / forgiven / discharged / canceled | N/A | $257,000 |
Student loans will begin to be awarded based on total enrollment (number of credit hours), beginning with the 2026-2027 academic year. This change is applicable to all students and is not subject to grandfathering rules. We are still waiting for the full calculation details to be finalized by the government, but it is important to remember that changes in enrollment within or between semesters may impact loan eligibility. The information below explains what has been shared with institutions up to this point by the Department of Education.
How it Works
Your total credit hours for the academic year determines your total loan eligibility for that year.
- If you are enrolled full-time for the academic year (for example, 24 credits total for an undergraduate student), you may be eligible for 100% of your annual loan limit.
- The assumption is that a student’s annual loan limit will be evenly split between the semesters in which the institution anticipates they will enroll, unless the student is enrolled less than full-time.
- If the student enrolls less than full-time, the loan(s) will be prorated based on the student’s enrollment for that semester and their eligible annual loan limit. The schedule of reduction formula determines the prorated eligibility.
Schedule of Reduction Formula
(Credit Hours Enrolled for the Academic Year ÷ Full-Time Credit Hours for the Academic Year) x 100
Student profile for both examples:
- First-year dependent student
- Full-time enrollment = 24 credit hours per year
- Annual loan limits:
- Subsidized Loan $3,500
- Unsubsidized Loan $2,000
Enrollment
Fall Semester = 15 credits (Full-Time)
Spring Semester = 9 credits (Less-Than-Full-Time)
Loan Eligibility
Fall Semester: $1,750 Subsidized & $1,000 Unsubsidized (50% of annual amount)
Spring Semester: $1,750 Subsidized Loan & $1,000 Unsubsidized Loan (50% of annual amount)
Schedule of Reduction Calculation:
24 Credits Enrolled for Academic Year ÷ 24 Full-Time Credits for Academic Year x 100 = 100%
The student is enrolled in a total of 24 credit hours between the Fall and Spring semesters, so the student meets full-time enrollment requirements for the academic year and qualifies for 100% of their annual loan limits.
Enrollment
Fall Semester = 9 credits (Part-Time)
Spring Semester = 15 credits (Full-Time)
Loan Eligibility
Fall Semester: $1,313 Subsidized & $750 Unsubsidized
Spring Semester: $2,187 Subsidized & $1,250 Unsubsidized
Schedule of Reduction Calculation:
Fall 9 Credits Enrolled for Academic Year ÷ 12 Full-Time Credits for Academic Year = 75%
Fall aid is reduced because the student is enrolled less than full-time within the first semester of the academic year. The calculation is based on only the fall semester; they are eligible for 75% of the semester amount.
24 Credits Enrolled for Academic Year ÷ 24 Full-Time Credits for Academic Year x 100 = 100%
The student meets full-time credit hours when combining the Fall and Spring credit hours, taking a total of 24 credit hours for the academic year. This allows the student to receive 100% of the annual loan limit, paying the remaining funds in the spring semester.
Changes to the Pell Grant program are applicable to all students. There is not a grandfathering provision.
Students with a Student Aid Index that exceeds twice the maximum Pell Grant Award will be ineligible to receive the Grant. For example, the maximum Pell Grand award amount for the 2026-2027 award year is $7,395. A student with a Student Aid Index (SAI) equal to or greater than $14,790 will be ineligible to receive a Pell Grant.
This will not impact students who qualify for the Pell Special Rule for dependents of certain deceased military service members and public safety officers.
Students who receive non-federal scholarships and/or grants that cover the entire cost of attendance (COA) are ineligible to receive a Pell Grant.
No. The law does not allow students to choose not to be grandfathered.
No. Once grandfathered status is lost, it cannot be restored.
No. Students must stay in the same degree program, or degree level for undergraduate students, and the same institution to maintain grandfathered status. Transferring to another school would be considered ceasing enrollment and a loss of grandfathered status. Transfer students will be subject to the new rules at the new institution.
Yes. Changing undergraduate majors is not considered moving into a new program and will not interfere with grandfathered status. However, the time limits for eligibility of grandfathered status will not reset or adjust after a change of major.
This webpage does not provide details regarding every proposed change within the OBBB but focuses on the provisions which will most impact our students. Additional resources for information have been published by Federal Student Aid and professional associations. Please visit: