One Big Beautiful Bill Act - Changes to Financial Aid

The One Big Beautiful Bill Act (OBBBA) passed by Congress in 2025 includes significant changes to federal student aid programs as a part of shifts in federal fiscal policy required by the bill.

Many of the changes will go into effect on July 1, 2026, but others will roll out over the next several years.

Updates as of May 1, 2026

Department of Education Released Final Rules

Please read through this entire page to learn more about the changes that may impact you directly.

All Students

It is important to note that ALL University at Buffalo undergraduate, graduate and professional programs define full time as 12 credit hours.

Schedule of Reduction (Reduction of loans for less than full-time enrollment)

  • Beginning with the summer 2026 semester, Federal Direct Subsidized, Direct Unsubsidized, and Direct Graduate PLUS loans must be adjusted for less than full-time enrollment for all students. A Schedule of Reduction calculation will take place prior to every loan disbursement. 

A reduction in credit hours after a loan disbursement will reduce the amount you will be able to borrow in a subsequent semester within the same aid year.

Introduction of a Lifetime Loan Limit

  • The new lifetime loan limit of $257,500 includes all loans borrowed across all Federal Direct Loan Programs (excluding Federal Direct Parent PLUS loans borrowed by parents on their student’s behalf) and will include loans borrowed from undergraduate, graduate and professional degree enrollment combined. The lifetime limit will include all loans borrowed regardless of amounts that may have been repaid, forgiven, cancelled or discharged. 
  • The lifetime loan limit will be in effect for all students who have not borrowed a federal direct loan prior to July 1, 2026.

Students planning to enroll in subsequent degree programs should start budgeting now since there is no way to expand lifetime eligibility by repaying your loans.

Treatment of a Leave of Absence (LOA)

  • Federal student aid rules specify that a student whose LOA exceeds 180 days in a calendar year must be considered withdrawn from their program.

Students grandfathered into pre-OBBBA rules will lose legacy provision status if their LOA period is greater than 180 days in a calendar year. When the student returns to their program, they will be subjected to the post-July 1 OBBBA rules. 

Time to Credential

  • Some of the OBBBA changes include a legacy provision that grandfathers current loan borrowers into the rules and regulations in place during the 2025-26 academic year.
  • In all cases, legacy provisions will remain in place for the lesser of 3 academic years or the difference between the student’s total program length and the portion of the program completed by the student as of July 1, 2026.

Example: An undergraduate student enrolled in a bachelor’s degree program has earned 60 credits toward their degree as of the end of the spring 2026 semester. This student has completed 2 years of their 4-year program and therefore has 2 years remaining. This student will qualify for the legacy provision for 2 years. 

Undergraduate Students

Pell Grant Changes

  • Students with an SAI equal to or greater than $14,790 (twice the maximum Pell Grant) are ineligible to receive a Pell Grant. 
  • Students who receive grants or scholarships from non-federal sources (institutions, state, or private) that cover their entire cost of attendance (COA) are ineligible to receive a Pell Grant, even if otherwise eligible for the program. 

Federal Direct Parent PLUS Loan Changes

  • There are new annual limits for Parent PLUS Loans. 
  • Effective July 1, 2026, Federal Direct Parent PLUS loans will be capped at $20,000 per student per year, with a $65,000 lifetime limit per dependent student.

Parent PLUS loans may not cover a higher cost of attendance for a dependent student with limited student aid. Other funding sources may be needed.

The $65,000 lifetime maximum includes all Parent PLUS loans borrowed on behalf of the student regardless of amounts that have been repaid, forgiven, cancelled or discharged.

  • Parent PLUS Loan legacy (grandfather) provision – A current student whose parents have borrowed a Parent PLUS loan on their behalf will be grandfathered into the rules that were in effect for aid years 2025-26 and prior. This legacy provision will be available for 3 academic years or the remainder of their expected time to credential, whichever is less.

This legacy provision is limited to the lesser of 3 years or the student’s time to credential. Legacy status will remain in place while the student remains enrolled in the same program at the same institution.  

Graduate and Professional Students

Federal Direct Graduate PLUS Loans

  • The Federal Direct Graduate PLUS loan program will be discontinued for new borrowers beginning on July 1, 2026. 

Current students who have not borrowed a Federal Direct Loan before July 1, 2026, and students enrolling in a new program who will not have a Federal Direct Loan disbursed before July 1, 2026 will not be eligible to borrow a Graduate PLUS loan.

  • Graduate PLUS Loan legacy (grandfather) provision: Federal Direct Graduate PLUS loans will remain available to current students who have borrowed a Federal Direct Loan prior to July 1, 2026, while enrolled in the same program of study. The Graduate PLUS loan program will be available for 3 academic years or the remainder of their expected time to credential, whichever is less. Students must remain in the same program at the same institution to qualify for this legacy provision.

New Federal Direct Unsubsidized Loan Limits for Graduate and Professional Students

  • Non-Professional graduate programs:
    • Up to $20,500/year, $100,000 aggregate borrowing limit.

The $100,000 aggregate limit does not include loans borrowed as an undergraduate student. However, it does include all unsubsidized loans borrowed while enrolled in any graduate degree-granting program. 

  • Programs designated as Professional under the new regulations:
    • Up to $50,000/year, $200,000 aggregate borrowing limit.

The $200,000 aggregate limit does not include loans borrowed as an undergraduate student. However, it does include all unsubsidized loans borrowed while enrolled in any graduate AND professional degree-granting program combined.

“Professional” vs. “Graduate” Program

The Department of Education has provided an updated definition of what will be considered a professional degree program beginning with the 2026-27 academic year. As of December 2025, a program may be considered professional if it is included in this list:
Professional Degree Programs
Pharmacy PharmD
Dentistry DDS or DMD
Veterinary Medicine DVM
Chiropractic  DC or DCM
Law LLB or JD
Medicine MD
Optometry OD
Osteopathic Medicine DO
Podiatry DPM, DP or PodD
Theology MDiv or MHL
Clinical Psychology PsyD or PhD
-OR-
  • Includes a specific Classification of Instructional Programs (CIP) code provided by the Department of Education, and 
  • Signifies both completion of the academic requirements for beginning practice in a given profession, and a level of professional skill beyond that normally required for a bachelor’s degree, and 
  • Is generally at the doctoral level, and requires at least six academic years of postsecondary education coursework for completion, including at least two years of post-baccalaureate level coursework, and 
  • Generally requires professional licensure to begin practice. 

UB’s Financial Aid Office will be working with academic departments to evaluate which programs meet these requirements.

Public Service Loan Forgiveness (PSLF) and Repayment

Public Service Loan Forgiveness (PSLF)

  • No changes to PSLF provisions, although new limitations on eligibility have been proposed separately from the OBBBA in other regulatory action.

New Repayment Plans

  • For new loans disbursed after July 1, 2026, the bill eliminates current income-driven repayment plans (IBR, PAYE, SAVE) and replaces them with a new Repayment Assistance Program (RAP). 
  • Students who have borrowed loans before July 1, 2026, and will borrow a new loan after July 1, 2026, are limited to the new RAP or the standard plans for the new loan. 
  • RAP borrowers will not be locked into a 30-year plan. They can switch to a standard plan, which ranges from 10 to 25 years. 
  • Borrowers with no new loans made on or after July 1, 2026, can continue to be eligible to enroll in the current Standard, Income Based (IBR), Graduated, and Extended repayment plans, and could also opt in to the new RAP. Current borrowers enrolled in ICR, PAYE, or SAVE plans must transition to a new repayment plan by July 1, 2028. If no selection is made by that date, they will be moved into RAP. 
  • More information on the new RAP is forthcoming. 

Additional Resources

For additional resources published by Federal Student Aid (FSA) and national associations, please visit the Federal Student Aid Announcements and Events website.