Updates

On July 4, 2025, the President signed the final version of the One Big Beautiful Bill Act (OBBBA) (H.R. 1) which included some substantial changes to federal student aid. We’re currently reviewing what this legislation means and awaiting additional guidance from the U.S. Department of Education. While it’s too soon to know all the impacts, the Institute is focused on how these changes could affect students — especially when it comes to new limits on graduate and parent borrowing. Most of the financial aid changes are expected to take effect starting July 1, 2026, unless noted otherwise.

This information is subject to change as we receive additional information and guidance from the Department of Education.

Policy Area Updates
Federal Pell Grant Eligibility Students are ineligible to receive Pell if their cost of attendance is already covered by other non-federal grants and/or scholarships. Cost of attendance includes tuition, fees, housing, food, books, course materials, supplies and equipment, transportation, and miscellaneous living expenses.
Parent PLUS Loan Limits* Parents are now limited to $20,000 per academic year/$65,000 lifetime per dependent student.
Student Loan Proration Borrowers enrolled less than full-time (12 hours) will only be able to borrow a prorated maximum loan offer based on enrolled hours.

*If the student or parent borrower has a Federal Direct Loan made before July 1, 2026, while the dependent student is enrolled in a program of study, the parent may be able to borrow under the old loan limits for 3 academic years or the remainder of their dependent student’s expected time to credential, whichever is less.

Policy Area Updates
Student Loan Limits Graduate students are now limited to $20,500 per academic year/$100,000 lifetime
Student Loan Proration Borrowers enrolled less than full-time (12 hours) will only be able to borrow a prorated maximum loan offer based on enrolled hours.
Graduate PLUS Loans Eliminated if you begin your academic program on or after July 1, 2026*
Borrowing Cap $257,000 borrowing cap on all federal loans (Excludes PLUS loans, includes undergraduate federal loans)

*Current graduate students can continue under the existing loan limits and may keep using Graduate PLUS loans—but only for a limited time. This eligibility lasts until the earlier of: (1) the end of their current academic program, or (2) three academic years. To determine how much eligibility a student has left, we must take the total length of their program and subtract the time they’ve already been enrolled. A “current borrower” is a student who borrowed at least one Graduate PLUS or Direct Unsubsidized Loan before July 1, 2026, and who stays in the same academic program after that date.

Policy Area Updates
Loan Repayment Plans

  • Implemented new and simplified Repayment Assistance Plan (RAP) with rates 1% to 10% of discretionary income

  • Eliminated SAVE plan

  • Extended forgiveness periods to 30 years

  • Introduced minimum monthly payments

  • All loans must be repaid on the same plan, so if you borrow before and after July 1, 2026 you will be limited to the standard or RAP plans

  • If you do not borrow new loans after July 1, 2026 you will be eligible to enroll in the current Standard, Graduated, Extended, or current

    • Income Based (IBR) repayment plans, and may also opt in to the new RAP

Expected time to credential is, from July 1, 2026, the expected time for a student to complete a program that is equal to or the lesser of:

  • Three academic years, as defined in 34 CFR 668.3; or

  • The period determined by calculating the difference between

    • the program length of student in which is enrolled; and

    • the period of such program of study that such individual has completed as of the date of determination

All information is tentative pending issuance of final regulatory text by the Department of Education