Important News Regarding Financial Aid
One Big Beautiful Bill Act Change to the Federal Loan Programs Starting July 1, 2026
| Loan Type | Who is Affected? | New OBBBA Rules | Legacy Rule Pre-July 1, 2026 Borrowers |
|---|---|---|---|
| Parent PLUS | Parents of Undergraduates | $20k/year cap; $65k total limit | Can still borrow up to the full cost of attendance |
| Undergrad Direct | All Undergraduate Students | No changes to lifetime limits | No changes |
| Grad PLUS | Graduate Students | Phased out for new borrowers | Available for up to 3 years if already borrowing |
| Grad Unsubsidized | Graduate Students | $20.5k/year cap; $100k total limit | Available for up to 3 years if already borrowing |
Federal Direct Grad PLUS Loans Are Being Phased Out
- Starting July 1, 2026, new borrowers in a new program are not eligible for the Federal Direct Grad PLUS Loans.
- If you started a new graduate program before July 1, 2026, you may still be eligible for Grad PLUS under the current rules.
- This legacying applies only to loans borrowed for your current program. If you borrowed Grad PLUS Loans for a previous program and start a new one after July 1, 2026, you won’t be eligible for the loan in your new program.
New Graduate Loan Limits Are Coming
Starting July 1, 2026:
- Graduate students may borrow the Federal Direct Unsubsidized Loan up to $20,500 per year, with a lifetime limit of $100,000.
- If you have borrowed a Federal Direct Loan (Unsubsidized or PLUS) in your current program of study, you will continue to qualify for the existing Federal Direct Unsubsidized Loan limits along with the Federal Direct Grad PLUS Loan for an additional three years or the end of your program, whichever comes first, as long as you have continuous enrollment. The Estimated Time to Completion (ETTC) for this is calculated by counting the number of semesters the student has been enrolled at any enrollment status (number of credit hours), even if they didn't borrow a federal loan during that semester, compared to the number of semesters per program (e.g. a two year program allows for four semesters of enrollment).
Undergraduate Loan Limits Remain the Same
- No changes were made to undergraduate borrowing limits, loan types, or the Pell grant program.
- New Federal Parent PLUS Loans borrowers will be capped starting July 1, 2026, at $20,000 per student per year and a lifetime maximum of $65,000 per student.
- For continuing Parent PLUS Loan borrowers who have borrowed for their students prior to July 1, 2026, the parent borrower can continue to borrow at the pre-July 1, 2026 borrowing levels, which are up to the Cost of Attendance minus other financial aid, for up to an additional three years or the end of the student's program, whichever is first. Borrow a federal loan during that semester, compared to the number of semesters per program (e.g. a four year program allows for eight semesters of enrollment).
Public Service Loan Forgiveness (PSLF) Is Unchanged
There are no changes to PSLF in this bill. Students pursuing careers in qualifying public service roles will still have this option available.
Loan Proration for Part-Time Students
- Students who are not full-time will have their Federal Direct Loan amounts pro-rated down for less than full-time (LTFT) enrollment.
- Colleges and universities are waiting on clarification from the US Department of Education (ED) on how this will be calculated for both graduate and undergraduate students.
Major Changes to 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 prior to July 1, 2026, and will borrow a new loan after July 1, 2026, are limited to the new RAP or the standard plans.
- The good news: RAP borrowers will not be locked into a 30-year plan. They can switch to a standard 10- or 25-year plan if they choose.
- Current borrowers who do not borrow a loan after July 1, 2026, and want to stay in an income-driven plan must enroll by June 30, 2028. Those who don’t will be automatically moved into RAP.
We’ll share more about RAP once ED releases more guidance, including examples of how it could affect monthly payments and long-term costs.
What's Next?
Our office is closely tracking all of these changes and will be updating this site to help students and alumni understand what these changes may mean for their financial aid. As soon as we have more concrete answers from ED and the National Association of Student Financial Aid Administrators (NASFAA), we’ll post updates.
NASFAA has put together a helpful chart that reviews all the provisions of the reconciliation bill. That can be found here.
Frequently Asked Questions
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Beginning in fall 2026, the federal government requires SAIC to adjust your annual loan limit based on your credit hours.
- Full-time (12+ credits): You receive 100 percent of your eligible loan amount.
- Half-time (6 credits): Your loan limit is reduced by 50 percent.
- Example: If you take 9 credits (75 percent of a full load), your loan limit will be 75 percent of the standard annual amount.
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Grad PLUS Loans
To keep your legacy/interim provision (the higher limits), you must stay in your "current plan of study." If you graduate and start a new degree (e.g., finishing your bachelor's and starting a new program) after July 1, 2026, you will be considered a "new borrower" under the new One Big Beautiful Bill rules.
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No. These federal changes only apply to Federal Direct Loans. Your SAIC merit scholarships, grants, and other institutional aid are not affected by the new One Big Beautiful Bill rules.
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