Federal Student Loan Updates: One Big Beautiful Bill Act (OBBB)
This page summarizes DBU’s current understanding of the OBBB and related federal guidance. It is offered as a resource to help students and families navigate the changing financial aid landscape.
For official federal information, please visit studentaid.gov.
The One Big Beautiful Bill Act (OBBB), enacted in July 2025, introduces several upcoming changes to federal student loan programs. Although these updates will not affect the 2025–2026 academic year, many provisions become effective July 1, 2026.
The DBU Office of Financial Aid is committed to supporting students and families as federal policies evolve. We will continue to update this page as additional guidance is released from the U.S. Department of Education (ED).
Quick Summary of What’s Changing
- Parent PLUS loans now have annual and lifetime limits (no more borrowing up to the full cost of attendance).
- Grad PLUS loans are eliminated for new graduate/professional borrowers.
- New limits apply to federal unsubsidized loans for graduate and professional programs.
- A single income-driven repayment plan—RAP (Repayment Assistance Plan)—replaces prior IDR options for new borrowers.
- Economic hardship and unemployment deferments phase out for new loans beginning July 1, 2027, and general forbearance options narrow.
- A new lifetime federal borrowing limit applies to all federal student loans (excluding Parent PLUS).
Please note: OBBB changes apply only to federal student loans; private student loans are not affected.
Key Changes Under the OBBB
1. Undergraduate and Parent PLUS Loans
- There are no changes for undergraduate loans, although undergraduate loans will count towards the new lifetime limits.
Beginning July 1, 2026, Parent PLUS loans will be capped at:
- $20,000 per year per student, and
- $65,000 total per student (lifetime maximum).
Previously, parents could borrow up to the full cost of attendance, making Parent PLUS a major gap-filling tool.
- Existing Parent PLUS borrowers who have borrowed for their students before July 1, 2026, can continue with the current limits for 3 more years or until the student’s program ends, whichever is less.
Planning Tips
- Consider all sources of aid: scholarships, grants, 529 savings, student federal loans, and work-study.
- Explore payment plans or private education loans only after maximizing available federal aid.
2. Graduate & Professional Students Face New Borrowing Limits
- Grad PLUS loans eliminated and will no longer be available.
- New unsubsidized loan limits apply:
- Most graduate programs: $20,500 per year, up to $100,000 total.
- Certain professional programs (see included below): $50,000 per year, up to $200,000 total.
Included professional programs:A negotiating committee convened by the agency has proposed a consensus definition that designates the following as professional degrees: Medicine (M.D., D.O.), Pharmacy (Pharm.D.), Dentistry (D.D.S., D.M.D.), Veterinary Medicine (D.V.M.), Law (LL.B., J.D.), Theology (M.Div., M.H.L.), Optometry (O.D.), Podiatry (D.P.M., D.P., or Pod.D.), Chiropractic (D.C. or D.C.M.), Clinical Psychology (Ph.D. or Psy.D.)
- Eligibility to Continue Borrowing Grad PLUS Loans
Current graduate students may continue to borrow Grad PLUS loans after the July 1, 2026, effective date if they meet the following criteria:
- Prior borrowing: They must have had a Federal Direct Loan (Subsidized, Unsubsidized, or Grad PLUS) disbursed for their program of study before July 1, 2026.
- Program continuity: They must remain enrolled in the same program of study at the same school for which they borrowed the initial loan.
- Time limit: This continuing eligibility lasts for up to three additional academic years (until June 30, 2029) or until they complete their program, whichever comes first.
Planning Tips
- Review program costs carefully if graduate school is part of your long-term plan.
- Compare institutional scholarships and employer tuition benefits.
- Use federal unsubsidized loans first; private loans as needed to cover remaining costs.
3. Loan Proration for Part-Timers
- The bill includes a provision to prorate loan amounts based on enrollment.
- This could mean that part-time students (e.g., those enrolled less than full-time) would only be eligible for a portion of the annual loan limit.
- We are awaiting clarification from ED on how this will be applied to both graduate and undergraduate students.
4. Repayment Options Become Simpler—But More Limited
For new borrowers starting July 1, 2026, only two repayment choices will be available:
- Standard Fixed Repayment Plan
- RAP: Repayment Assistance Plan, a new income-driven plan with forgiveness after 30 years
Planning Tips
- Choose Standard if you want predictable payments and aim to pay off loans more quickly.
- Consider RAP if you expect lower or variable income; RAP offers interest protections to keep your balance from growing.
- Borrowers currently using ICR, PAYE, or SAVE will need to transition to a different plan by July 1, 2028.
5. Fewer Deferment and Forbearance Options for Future Loans
For federal loans first disbursed on or after July 1, 2027:
- Unemployment and economic-hardship deferments will end.
- General forbearance options will be more limited.
Planning Tips
- Build a modest emergency fund while in school to help bridge short-term financial challenges.
- Keep your contact information current with your loan servicer to make timely adjustments to your repayment plan if your financial situation changes.
6. A New Lifetime Borrowing Limit
The law establishes a $257,500 lifetime federal borrowing limit for students (not including Parent PLUS loans).
Planning Tips
- If you plan to complete multiple degrees, map out your full academic pathway early to avoid hitting the cap partway through a program.
The Bottom Line
The OBBB represents the most extensive update to federal student loans in two decades. By capping Parent PLUS borrowing, eliminating Grad PLUS, creating a single income-driven plan, tightening deferment rules, and imposing a lifetime loan limit, the law reshapes how students and families plan and pay for college.
While the new structure offers more clarity, it may also require more intentional financial planning. The DBU Office of Financial Aid is closely monitoring these changes and will continue to provide updates and guidance as implementation approaches.