Changes to Federal Student Aid in the One Big Beautiful Bill Act
The Office of Financial Aid is here to guide you through changes to federal aid
The One Big Beautiful Bill Act (OBBBA), a federal budget reconciliation package signed into law on July 4, 2025, includes several significant changes to federal student aid that will take effect on July 1, 2026. Among these changes are new limits for all federal student loans.
There are no changes to student aid for the Fall 2025 and Spring 2026 terms.
**Please note, the Department of Education is continuing its negotiated rule-making process. As the Department releases further guidance, this page will be updated**
Undergraduate Students
The OBBBA maintains the current student loan limits for undergraduate students.
However, the law does create a lifetime borrowing cap of $257,000 for all federal loans excluding parent PLUS loan amounts. This limit includes the undergraduate aggregate limit of $57,000. This means that you cannot borrow $257,000 in federal loans, of which no more than $57,000 can be undergraduate loans. This can lower your ability to borrow federal loans, mainly for graduate school.
If you have already borrowed a Federal Direct Loan before July 1st 2026, you will be able to borrow under the current loan limits for 3 academic years or until you finish your degree (whichever is shorter)
Starting July 1st, 2026, there will be a new cap of $20,000 per student per year for Parent PLUS loans with an aggregate limit of $65,000 per student. Previously, Parent PLUS loans could be taken up to the cost of attendance with no annual or aggregate limit.
Borrowers who have borrowed a Parent PLUS loan will be able to borrow under the current unlimited limits for either three academic years or until the student completes their degree program (whichever is shorter)
Graduate Students
The One Big Beautiful Bill Act eliminates the Graduate PLUS Loan program effective July 1st 2026. However, there is a legacy provision allowing borrowers that have already borrowed a Graduate PLUS loan before July 1st 2025 to continue to borrow Graduate PLUS Loans for 3 academic years or for the remainder of their expected time to receive their credential/degree.
The OBBBA creates an annual Graduate unsubsidized loan limit of $20,500 for graduate students.
The law also creates an aggregate limit of $100,000 for graduate students (this limit does not include loans borrowed as an undergraduate).
For students that have already borrowed a graduate unsubsidized loan before July 1st 2026, the current graduate limits will continue to apply for 3 years or the remainder of your expected time to receive your credential, whichever is less.
Looking for other sources of loan funding?
In addition to federal direct loans, parents of undergraduate students can apply for a Federal Direct Parent PLUS loan
Undergraduate and graduate students can also apply for private alternative loans, although they should consider applying for federal and institutional aid first.