Federal Student Aid Changes Coming in 2026

The One Big Beautiful Bill Act (OB3), signed into law in July 2025, includes significant changes to federal student
financial aid that take effect beginning July 1, 2026. These changes may affect how students and families pay for
college. Below is a summary of the updates currently known, organized by type of financial aid.

The U.S. Department of Education (ED) is expected to publish final regulations and additional implementation
guidance in late spring 2026. For the most current federal information, please visit ED's One Big Beautiful Bill Act
Update webpage.

As additional guidance becomes available, we will continue to update this page with the latest information. We
understand these changes may raise questions, and our team is committed to providing timely, accurate information
to help you navigate the financial aid process.

Undergraduate and Graduate Loans

Federal student loans are borrowed in the student's name and must be repaid. In most cases, repayment begins
after you graduate, leave school, or enroll less than half-time.

What's Changing on July 1, 2026  

• The Grad PLUS Loan program will be discontinued and unavailable for new borrowers.
• Legacy Provision: Graduate students who have borrowed a Direct Loan (an Unsubsidized or Grad PLUS
  Loan) disbursed before July 1, 2026 for their program, may continue borrowing under existing loan limits
  and Grad PLUS Loan rules for up to three more academic years or until their program ends - whichever
  comes first. A stop in enrollment or a change to program of study will end Legacy Provision eligibility, and
  the student will be held to the new OBBBA rules.
• Borrowing limits will now be capped as follows:
  • Undergraduate: no changes
  • Graduate (unsubsidized only): $20,500 per year, up to $100,000 lifetime
  • Total lifetime borrowing limit for all federal student loans (except Parent PLUS): $257,500 (Note
    that all student loans, including Graduate PLUS Loans, will count against the new lifetime
    borrowing limit).
• Enrollment Status: If enrolled less than full-time, loan eligibility (annual amount) will be prorated (reduced).

What This Means for You  

• Current graduate student borrowers: If your Direct Loan(s) have been disbursed before July 1, 2026 (for
  academic year 2025-2026), you may keep borrowing under the old terms for up to 3 more academic years
  or until your program ends, whichever comes first.
• Prospective graduate students: Grad PLUS Loans won't be available starting with the 2026-2027 academic
  year. Students with financial need will still be eligible for federal unsubsidized Direct Loans (with the new
  caps), private loans, and scholarships.
• All graduate students: Connect with our office for one-on-one guidance on how these changes may affect
  you.

 

Parent PLUS Loans

Parent PLUS Loans are federal loans that parents can borrow to help pay for their dependent student's
undergraduate education. The parent borrower is responsible for repaying the loan.

What's Changing on July 1, 2026  

• Parents may borrow up to $20,000 per year, with a $65,000 lifetime maximum per student.
  • Legacy Provision: Parents who borrowed before July 1, 2026, may continue borrowing under
    existing Parent PLUS Loan rules for up to three more academic years or the student completes
    their program ends - whichever comes first. 

What This Means for You  

• Current Parent PLUS borrowers: You may still borrow under the old rules for the length of the Legacy
  Provision (see above).
• New Parent PLUS borrowers: Be aware of the new caps listed above. Families may need to consider
  borrowing private loans.

 

Repayment Plans for Student Borrowers  

After you graduate, leave school, or enroll less than half-time, you'll enter repayment on your federal student loans.
Before repayment begins, you'll choose a repayment plan that determines your monthly payment and repayment
timeline.

Already repaying your loans? Contact your federal loan servicer to discuss how these changes may affect your
repayment options. This page provides a general overview and may not address every individual situation.

What's Changing on July 1, 2026  

• Some existing repayment plans will end (ICR, PAYE, and SAVE).
• Monthly payments under RAP are based on factors such as income and family size. Payments may be as
  low as $10 per month, and any remaining balance may be forgiven after 30 years of qualifying payments.
• A new standard repayment plan will be created. Payments under this plan will have four fixed terms of 10,
  15, 20, or 25 years (based on the amount borrowed). 

What This Means for You  

• Current Borrowers:
  • If all of your federal student loans were borrowed before July 1, 2026, you may continue to choose
    from the current Standard, Graduated, Extended, or Income-Based Repayment (IBR) plans, or you
    may choose the new Repayment Assistance Plan (RAP).
  • If you are currently enrolled in ICR, PAYE, or SAVE, you must transition to a different repayment
    plan by July 1, 2028, (either current income based repayment plan, current standard plan, or RAP).
  • If you borrow additional federal student loans on or after July 1, 2026, all of your federal
    student loans must be repaid under the same repayment plan. This means borrowers with
    both pre-July 1, 2026, and post-July 1, 2026 loans will generally be limited to choosing either RAP
    or the new Standard Repayment Plan.
• New Borrowers: For loans made on or after July 1, 2026, there will be two repayment plan options - the new
  standard repayment plan or RAP.

Please note that this information is subject to change as additional federal guidance becomes available. For the most
accurate and up-to-date information about your repayment options, please contact your federal loan servicer.

 

Repayment Plans for Parent Borrowers

Parent PLUS Loan borrowers can begin repayment once the loan is fully disbursed or request a deferment until six
months after their student graduates, leaves school, or enrolls less than half-time.

We encourage any borrower who is currently in repayment of their federal loans to contact their loan servicer and
discuss how these changes may impact their situation. This website provides a high-level overview, and there may
be other details a current borrower in repayment will want to consider before deciding how best to proceed.  

What's Changing on July 1, 2026  

• A new standard repayment plan will be created. Payments under this plan will have four fixed terms of 10,
  15, 20, or 25 years (based on the amount borrowed).

What This Means for You  

• Current Borrowers:
  • If no new loans are made on or after July 1, 2026, you are eligible to enroll in the current Standard,
    Graduated, Extended, or income based (IBR) repayment plan.
  •  If you borrowed prior to July 1, 2026, AND subsequently borrow after July 1, 2026, all Parent PLUS
    Loans must be repaid under the same repayment plan.
• New Borrowers: Parent PLUS Loans first disbursed on or after July 1, 2026, may only be repaid under the
  new Standard Repayment Plan.

Please note that this information is subject to change as additional federal guidance becomes available. For
the most accurate and up-to-date information about your repayment options, please contact your federal
loan servicer.