One Big Beautiful Bill Act - Changes to Federal Student Loans
Federal FINANCIAL AID 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 the To Do List will be held September 1, 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 and loan limits will remain the same for undergraduate students:
- $57,500 for independent students
- $31,000 for dependent students
View Town Hall Presentation on changes for undergraduate students.
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.
- These will be counted towards the lifetime borrowing limit for graduate students, even if they are borrowed prior to July 1, 2026.
*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.
View Town Hall Presentation on changes for graduate students.
*A recent court ruling has temporarily increased the federal student loan borrowing limits for certain educational programs, including Speech Language Pathology, Athletic Training, Physical Therapy, Registered Nursing, and Nursing Practice. These programs now have the option to borrow up to $50,000 per year (or up to your program’s cost of attendance, whichever is lower). However, the borrowing limits could return to the previous graduate levels if the court ultimately rules in the federal government’s favor. If you are enrolled in one of these programs, please exercise judgement and carefully evaluate your borrowing needs considering that future federal action could affect annual and lifetime borrowing eligibility. View additional FAQs from NASFAA on this topic here.
Pell grant updates
Students with full merit funding:
- Students whose Cost of Attendance (COA) is fully covered by non-federal aid will no longer be eligible for a Federal Pell Grant.
- Ends the previous allowance for Pell Grants to exceed COA when combined with other aid
- Example: A Pell-eligible student with a scholarship covering the full Cost of Attendance will no longer receive both the scholarship and the Pell Grant
Students with a high Student Aid Index (SAI):
- Students with an SAI greater than twice the maximum Pell Grant amount will be ineligible for any Pell Grant
- Example: If the max Pell Grant is $7,395, students with an SAI over $14,790 will not qualify
REPAYMENT PLAN CHANGES
For all federal loan borrowers with disbursed funds after July 1, 2026:
- The RAP (Repayment Assistance Plan) will replace SAVE, ICR, IBR and PAYE for loans disbursed after July 1, 2026.
- RAP calculates minimum monthly payments based on adjusted gross income and cannot be forgiven until 30 years of qualifying payments are made.
- Public Service Loan Forgiveness (PSLF) will remain in place for qualifying borrowers.
Resources for futher information on repayment changes:
- New NASFAA Resources: OBBBA Loan Repayment Plan Options:
- NASFAA (National Association of Student Financial Aid Administrators) has developed two new resources addressing the significant changes to federal student loan repayment plans enacted under the One Big Beautiful Bill Act (OBBBA). Both resources outline repayment plan availability and associated loan forgiveness options for different borrower types, with one presented in a table format for general reference and the other in a flowchart format for borrower-specific scenarios.
Loan proration for Enrolled Less than Full-Time
For both undergraduate and graduate students enrolled less than full-time:
- Starting July 1, 2026, federal law requires institutions to prorate annual loan amounts based on your enrollment status. If you are enrolled less than full-time, your loan eligibility will be reduced proportionally. This rule will apply to all students, including those who fall under the Legacy Provision.
- Full-time enrollment for Undergraduate students is defined as 12 or more credits earned per semester
- Full-time enrollment for Graduate students is defined as 9 or more credits earned per semester
- Please see the below chart for examples of how loans may be prorated based on enrollment.
Student Level
| Loan Types | Enrollment
| Full Loan Eligibility | Prorated Amount | |
Undergraduate
| Direct Subsidized Loan | 9 Credits - Fall 6 Credits - Spring | Maximum Subsidized Direct Loan Annual Limit - $5,500 | Proportionally distributed across semester based on enrollment level: $2,079 - Fall | |
| Undergraduate | Direct Unsubsidized Loan | 9 Credits - Fall 6 Credit - Spring | Maximum Unsubsizided Direct Loan Annual Limit - $2,000 | Proportionally distributed across semester based on enrollment level: $756 - Fall | |
| Graduate | Direct Unsubsidized Loan | 12 Credits - Fall 6 Credits - Spring | Maximum Unsubsizided Direct Loan Annual Limit - $20,500 | Proportionally distributed across semester based on enrollment level: $10,250 - Fall
| |
| Graduate | Grad PLUS | 12 Credits - Fall 6 Credits - Spring | Maximum Unsubsizided Direct Loan Annual Limit - $34,625 | Proportionally distributed across semester based on enrollment level: $17,313 - Fall |
next steps for students
Check Your Borrowing History:
- Log in to studentaid.gov to check your total lifetime borrowing.
Submit Your FAFSA:
- Complete the 2026-27 FAFSA to apply for federal financial aid.
Avoid Academic Changes
- Any changes in program or break in continuous enrollment may cause a loss of legacy status. Withdrawal from courses or taking a leave of absense could disqualify you from the legacy provision and cause new restrictions to be put in place on your borrowing upon return.
Search for Outside Scholarship Opportunities:
- Scholarship funding can help offset loan borrowing as this is money that will not require repayment. Check out the SFS additional scholarships page to see what free internal and external scholarship opportunities might be available to you.
Investigate Private Lender Options:
- You can explore private education loan options through UD's lender software FastChoice. Search carefully, many private lenders often have higher interest rates and fewer protections. NASFAA has put together this checklist for private loan borrowing to help prospective student or parent borrowers.
Explore Credit & Financial Wellness Resources:
- Visit SFS's financial wellness page for more information on how to finance a college education.
- Visit the following links to learn more about building your credit and paying for college:
FAQ
Only students who have borrowed from the Federal Direct Loan program prior to July 1, 2026 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.
Students enrolled in less than full-time credits will have loans subject to proration based on enrollment level, meaning you will only be eligible for a portion of the annual loan limit. This applies to all graduate and undergraduate students. For futher information, see the examples above.
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.
Disclaimer:
This information reflects University of Delaware's understanding of enacted legislation (P.L. 119-21) and initial guidance from the U.S. Department of Education, as of July 2026. It may contain inaccuracies and is subject to change as further federal regulations and guidance are issued throughout the 2026–27 academic year. Always consult a financial aid aidvisor for personalized advice.