One Big Beautiful Bill Act - Changes to Financial Aid

Note: Institutions are waiting for official guidance and regulations from the Department of Education. The information provided below is based on previously announced guidance and is subject to change as federal negotiations continue.

• Federal Direct Loans for undergraduate students will remain mostly unchanged with the exception of prorated annual loan limits for students with less than full-time enrollment. Additional guidance will be forthcoming.
• 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.
• 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.
• Existing Parent PLUS borrowers who have borrowed for their students before July 1, 2026, can continue with the current limits for 3 more years or until the student’s program ends.

• The Federal Direct Graduate PLUS loan program will be discontinued beginning on July 1, 2026. This program will not be available to new borrowers.
• Legacy 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 a 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.

• Non-Professional graduate programs:
  • Up to $20,500/year, $100,000 aggregate borrowing limit.
• Programs designated as Professional under the new regulations:
  • Up to $50,000/year, $200,000 aggregate borrowing limit.
• Final definitions of “professional” vs. “graduate” programs are still unclear (more on this below).
• A Loan Reduction provision will require institutions to prorate annual loan amounts for students with less than full-time enrollment. Additional guidance will be forthcoming. 
• 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.
• Legacy Provision: Current students who borrowed a Federal Direct Loan prior to July 1, 2026, while enrolled in a credentialled program may continue to borrow under the current loan limits for 3 academic years or the remainder of their expected time to credential, whichever is less.

• Is included in the following list: Pharmacy (Pharm.D.), Dentistry (D.D.S. or D.M.D.), Veterinary Medicine (D.V.M.), Chiropractic (D.C. or D.C.M.), Law (L.L.B. or J.D.), Medicine (M.D.), Optometry (O.D.), Osteopathic Medicine (D.O.), Podiatry (D.P.M., D.P., or Pod.D.), Theology (M.Div., or M.H.L.), and Clinical Psychology (Psy.D. or Ph.D.)

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.

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

• 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, current 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.

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