One Big Beautiful Bill Act - Changes to Federal Student Loans
Federal Student Loan changes
The One Big Beautiful Bill Act (OBBBA) was enacted in July 2025. This legislation includes significant changes in federal student loan programs effective July 1, 2026. The University of Delaware continues to monitor these changes and will update our information online accordingly as additional information is available from the federal government. Please read below to learn more.
Join SFS for a Virtual Town Hall
Our SFS Town Hall Tuesday presentation covering information on One Big Beautiful Bill Updates for Graduate Students is scheduled for February 3, 2026 at 7pm.
What We Know - underGraduate Students
Parent PLUS Loan Limits
- Beginning July 1, 2026, Parent PLUS loans will be capped at at $20,000 per student per year, with a $65,000 lifetime limit per dependent student.
- Existing Parent PLUS loan borrowers fall under the legacy provision and can continue with the current limits for 3 more years or until the student’s program ends, whichever is less.
Undergrad Unsubsidized Direct Loan Limits
- There are no major changes to undergraduate loans; however, loans will now count towards the new lifetime limit of $257,500.
What We Know - Graduate Students
Grad PLUS Loans
- Beginning July 1, 2026, the Graduate PLUS Loan program will be eliminated. On that date, new loans will not be available for new borrowers.
- The legacy provision states that if a borrower has a Federal Direct Loan made before July 1, 2026, while enrolled in a program of study, the borrower can continue to borrow from the program for 3 academic years or the remainder of their expected time to credential, whichever is less.
Grad Unsubsidized Direct Loan Limits
- Professional programs (e.g., medicine, law) - Up to $50,000/year, $200,000 lifetime borrowing limit.
- Other graduate programs (including nursing) - Up to $20,500/year, $100,000 lifetime borrowing limit.
FAQ
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 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.