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.

Updates as of August 4, 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 loan amounts will be reduced when students are enrolled less than full-time. 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, canceled or discharged. 
  • The lifetime loan limit will be in effect for all students who have not borrowed a federal direct loan in their current program of study 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.

Legacy Provisions

  • Several 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.
  •  Transfer to a new institution.
  • Change in program.
    • For undergraduate students, this means changing degree type (ex: bachelor's to a master's degree)
    • For graduate students, this means changing major (ex: master's in education to master's in social work.) Changes in concentration within the same major may be allowed. 
    • Students enrolled in combined degree programs may lose legacy status when progressing to the second portion of the program. 
    • We recommend working with academic and financial aid advisors to evaluate impacts prior to applying for the change for information specific to you. 
  • Exhausting the time to credential, or maximum program length. 
    • The OBBBA regulation defines program length as the shortest amount of time for a full-time student to complete the requirements for a specific program of study. Programs designed for part-time enrollment must be converted.
    • Transfer credits and college credits earned in High School will count as completed semesters and reduce the remaining time to credential time frame.  
  • Leave of absence (LOA) greater than 180 calendar days. 
    • Federal student aid rules specify that a student whose LOA exceeds 180 days in a calendar year must be considered withdrawn from their program. When an LOA student returns to their program, they will be considered a new rule student. 
  • In all cases, legacy provisions will expire on June 30, 2029, regardless of the actions above.

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

  • 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 for students who have not borrowed a federal direct loan in their current program of study.

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

Beginning with the 2026-27 academic year, the Department of Education provided a new definition of what will be considered a professional degree program for financial aid purposes. 
 
In late June 2026, the U.S. District Court for the district of Columbia initiated a court order that temporarily sets aside, or stayed, portions of the regulations related to the Professional Program designation. As a result of the court order, additional programs have been temporarily designated as professional for financial aid purposes, while a few from the original list have been temporarily removed. 
 
UB's Financial Aid Office will be working with academic departments to evaluate which programs temporarily qualify for the professional designation under the active court order and will make the required adjustments once the court announces the final ruling. 

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.