Frequently Asked Questions

The One Big Beautiful Bill Act (OBBBA) is a federal law signed on July 4, 2025, that reshapes student financial aid—especially federal student loans, repayment plans, and accountability for academic programs.Most changes take effect for periods of enrollment beginning July 1, 2026.

In simple terms: It changes how much students can borrow, how loans are repaid, and how schools are held accountable.

The OBBBA will affect:

• Undergraduate students
• Graduate and professional students
• Parents borrowing Parent PLUS loans
• Institutions that participate in federal aid programs

No. The Pell Grant will remain intact, and Congress provided mandatory funding to address the projected Pell shortfall.

Workforce Pell is a new Pell Grant option for short-term workforce programs that:

• Are 150–600 clock hours.
• Are at least 8 weeks in duration, but fewer than 15 weeks.
• Lead to an in-demand, portable credential.
• Meet strict completion and job-placement benchmarks.

Students cannot receive both Workforce Pell and traditional Pell at the same time, and Workforce Pell usage counts toward lifetime Pell eligibility.

Workforce Pell will go into effect July 1, 2026.

The Graduate PLUS Loan program is eliminated for new borrowing beginning July 1, 2026.

However, current borrowers may continue borrowing under legacy rules for up to three academic years or until they complete their program—whichever comes first.

• Graduate students
  • Annual limit: $20,500
  • Aggregate limit: $100,000

• Professional students
  • Annual limit: $50,000
  • Aggregate limit: $200,000

Undergraduate borrowing does not count toward these totals. Professional degree definitions will be defined by law.

A new lifetime limit of $257,500 will apply to all federal student loans excluding Parent PLUS loans.

Parent PLUS loans are changing beginning July 1, 2026:

• A $20,000 annual limit per dependent student.
• A $65,000 aggregate limit per dependent student.

Legacy borrowers may continue under current rules for a limited time.

Yes. Institutions may now set lower loan limits by academic program, but:

• Limits must apply to the entire program.
• No case-by-case increases are allowed.
• Institutions must clearly disclose these limits.

Annual loan limits must now be prorated based on enrollment intensity.

Example:
75% enrollment = 75% annual loan limit eligibility.

This applies beginning with the 2026–27 award year.

Yes. For new borrowers after July 1, 2026, only two repayment options will exist:

1. A new Standard Repayment Plan
2. The Repayment Assistance Plan (RAP)

Older IDR plans will end by July 1, 2028.

RAP is a new income-based repayment plan:

• Payments will be 1–10% of Annual Gross Income (AGI)
• $10 minimum monthly payment
• $50 monthly reduction per dependent
• 30-year repayment term
• No negative amortization