One Big Beautiful Bill Act - Changes to Federal Student Loans

By borrowing from the Federal Direct Loan program prior to July 1, 2026, a student can be grandfathered in to current loan borrowing limits for up to 3 years or to the completion of their degree program, whichever is less. For Grad PLUS or Parent PLUS, current borrowing limits includes funding up to cost of attendance less any other sources of financial aid such as scholarships or grants. Any leave of absence, break in enrollment or change in major could potentionally result in a loss of legacy provision status. 

More information is available in this breakdown of Federal Student Aid Changes chart about specific program classiciations, although there remains some uncertainty regarding the current definition of "professional program." For the upcoming academic year, the federal government may continue to provide clarity concerning which programs qualify for the higher borrowing limit. 

This legislation contains a "Legacy Provision" for existing direct loan borrowers. It is uncertain, but this indicates that a student who borrows any Direct Loan or Grad PLUS before July 1, 2026, will remain eligible to borrow a Grad PLUS loan for the “3-year or until program completion” window so long as that student remains in the same program at the same school for which they borrowed the pre-July 1, 2026 loan.

There are provisions in this legislation that will prorate loan amounts based on enrollment. This could effect part-time graduate or undergraduate students by making them eligible for only a portion of the annual loan limit. 

For 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 borrower after that date (even if they have existing loans) will be limited to the new RAP or standard plans for new loans. Only students who have borrowed prior to July 1, 2026 and have no new loans after that date will remain eligible for the current standard Income Based Repayment plans. 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.

You can submit a request to receive a Title IV refund on your account by logging in to this page. A Title IV credit balance occurs whenever the amount of Title IV funds credited to a student’s account for a term exceeds the amount assessed the student for allowable charges associated with that term. The University of Delaware will pay the credit balance directly to the student or parent (in the case of a PLUS loan) as soon as possible but no later than 14 days after the credit balance was created, in accordance with federal regulations. Title IV funds include:

• Direct Subsidized loans
• Direct Unsubsidized loans
• Direct Graduate PLUS loans
• Direct Parent PLUS loans
• Pell grants
• Supplemental Educational Opportunity grants (SEOG)
• Teacher Education Assistance for College and Higher Education (TEACH) grants

The only exception is when a student gives specific written permission to hold all or a portion of the credit balance for additional tuition and fees during the same loan period, within the limited circumstances permitted by federal regulations.