The One Big Beautiful Bill Act (OB3) was signed into law on July 4, 2025, with its provisions scheduled to take effect on July 1, 2026. The U.S. Department of Education is currently developing guidance to support the implementation of this legislation, which introduces substantial changes to federal student aid programs. While certain elements of the law are clearly defined, many others require additional clarification from the Department. As additional guidance and official updates become available, we will continue to revise and expand this webpage to ensure it reflects the most accurate and actionable information.
The Federal Pell Grant program may no longer exceed a student’s Cost of Attendance when combined with all other sources of financial aid. Although this change takes effect on July 1, Pell Grant eligibility will continue to be determined based on the information provided on the FAFSA and the eligibility calculations established by the U.S. Department of Education.
Students who receive non-federal grants or scholarship assistance covering their entire cost of attendance are not eligible to receive a Pell Grant even if they are eligible for the program.
Eligibility for Federal Direct Loan amounts will be prorated for students enrolled for less than 12 credits hours per term. When a student's enrollment falls below full‑time status, the Federal Direct Loans must be adjusted according to the federally mandated Schedule of Reduction (SOR). These adjustments may affect loan eligibility in future terms and could result in a balance due if course drops occur after the refund period has ended.
Parent PLUS Loan Limits are changing
1. The Annual limit is now $20,000 per year, per student
2. The Lifetime limit is now $65,000 per student
3. Previous PLUS loan borrowers are now classified as legacy borrowers. Legacy borrowers
include any undergraduate students who received a federal loan prior to July 1, 2026.
4. These changes affect ONLY new undergraduate student borrowers; parent borrowers should plan carefully.
5. The legacy provision for these borrowers will remain in effect for up to three
academic years, or for the remainder of the student’s expected time to complete their
program within its published length, whichever period is shorter.
6. Current borrowers who meet the legacy provision remain eligible for it only for
a limited period (generally no more than three academic years). If a student's program
extends beyond the allowable legacy window, the student will become subject to the
new annual and lifetime Federal Direct Loan limits.
The "Loan Limits for Legacy Borrowers" column continues for borrowers who meet legacy conditions.
Federal Student Loan Limits Under Previous Law and OB3
| Category of Borrower | Loan Limits for Legacy Borrowers | Loan Limits for New Borrowers Under OB3 |
|---|---|---|
| Undergraduate Students |
$5,500 to $12,500 annually; $31,000 to $57,500 in aggregate |
$5,500 to $12,500 annually $31,000 to $57,500 in aggregate |
| Nonprofessional Graduate Students | $20,500 or the Cost of Attendance (as defined by the institution); whichever is less |
$50,000 annually; $100,000 aggregate |
| Professional Graduate Students | $20,500 or the Cost of Attendance (as defined by the institution); whichever is less |
$50,000 annually; $200,000 in aggregate |
| Parents of Undergraduates | $20,500 or the Cost of Attendance (as defined by the institution) |
$20,000 annually; $65,000 in aggregate (per child) |
Source: U.S. Department of Education, Federal Student Aid, and One Big Beautiful Bill Act, H.R. 1, 119th Cong. (2025).
There is a new lifetime limit in effect of $257,500 for all combined federal student loans. This inlcudes the amount that a student has borrowed previously through the Federal Graduate PLUS loan. Legacy borrowers are not subject to this lifetime limit.
The Graduate PLUS Loan program has been discontinued for new borrowers. However, students who have borrowed any federal loan prior to July 1, 2026, may remain eligible for the Graduate PLUS Loan if they meet all the following conditions:
Lifetime Loan Limit
A new lifetime borrowing limit of $257,500 is now in effect for all combined federal student loans. This total includes any amounts previously borrowed through the Federal Graduate PLUS Loan. Legacy borrowers are exempt from this lifetime limit. (Lifetime Loan Limit)
