One Big Beautiful Bill Act

What You Need to Know

Legacy Provisions

The new rules have limited legacy provisions that apply to some continuing students, but not all. Three years is the maximum timeframe for the legacy provisions, however, for many continuing students their timeframe will be shorter. The legacy provision period is determined by the published full-time length of the student’s program minus the amount of time a student has already attended. The amount of time the student has already attended is based on the number of terms, not the number of credits taken. Once a student’s legacy provision timeframe expires, the new OBBBA rules apply. It is important to note that any break in enrollment (including a leave of absence) may cause a loss of eligibility for legacy provisions.

Parent PLUS loans:  

There are new Parent PLUS loan limits: a $20,000 per year cap per dependent student and a $65,000 aggregate limit per dependent student (without regard to amounts forgiven, repaid, canceled, or discharged). These provisions are effective July 1, 2026. Parent PLUS loans are not subject to annual loan limit reduction based on students’ enrollment level.

Undergraduate loan limits:

The law maintains the current limits for annual and aggregate borrowing and does not include any changes to undergraduate loan limits, except for the provision regarding annual loan limit reductions for less than full-time students.

Graduate PLUS loans:

Graduate PLUS loans will be eliminated entirely within the next three years. New student borrowers will not have this option beginning July 1, 2026, nor will continuing students who do not qualify for limited legacy provisions.

Graduate loan limits:

For new borrowers after July 1, 2026, the law caps the annual graduate loan limits at $20,500 for graduate students. The aggregate limit is capped at $100,000 for graduate students.

Lifetime borrowing cap on all federal loans:

The law contains a $257,500 borrowing cap on all federal student loans, including Graduate PLUS loans, but excluding borrowed Parent PLUS loan amounts. There is a new $100,000 borrowing cap on any federal graduate level loans (excludes Graduate PLUS loans, repaid amounts and undergraduate loans).

Annual, aggregate, and lifetime loan limits effective date:

The law requires institutions to reduce annual loan amounts in direct proportion to the percent of full-time the student is enrolled.

Annual loan limit reduction for less-than-full-time enrollment:

The law requires institutions to reduce annual loan amounts in direct proportion to the percent of full-time the student is enrolled.

Repayment plan changes:

The new law creates two new repayment plans:  the tiered Standard plan and the Repayment Assistance Plan. 

Certain income-contingent repayment plans will be ending by July 1, 2028, including ICR-Income Contingent Repayment; PAYE-Pay as You Earn; and SAVE-Saving on a Valuable Education. Borrowers enrolled in these plans will need to change to one of the new plans by June 30. 2028 or they will be automatically enrolled in the RAP – Repayment Assistance Plan.

As of July 1, 2027, there will be additional loan repayment changes going into effect including loan rehabilitation, deferment changes and changes to forbearance timelines.