Federal Education Loan Changes for 2026–27 and Beyond

Public Law 119-21, the reauthorization statue also known as the One Big Beautiful Bill Act (OBBBA), includes significant changes to federal student loan programs for the 2026–27 academic year and beyond. Many of the details of these changes have yet to be announced. Here is what we know so far:

Graduate Unsubsidized Direct Loans

• Starting July 1, 2026, most graduate students who have not already borrowed for their current degree program will be subject to a new $100,000 lifetime borrowing limit. Students in certain professional programs will have a $200,000 lifetime limit.
  
  
• Graduate students who have already borrowed Unsubsidized loans for their current degree program can continue to borrow under the current limits until their degree program ends or June 30, 2029, whichever comes first.

Graduate PLUS Loans

• Starting July 1, 2026, graduate students who have not already borrowed for their current degree program will not be eligible for new Grad PLUS loans.
  
  
• There will be some continuing eligibility for existing Grad PLUS borrowers as they complete their current programs.

Undergraduate Subsidized/Unsubsidized Direct Loans

• Annual and aggregate borrowing limits will stay the same.

Parent PLUS Loans

• Starting July 1, 2026, parent PLUS loans will be capped at $20,000 per undergraduate student per academic year, with a lifetime limit of $65,000 per student.
  
  
• Parent PLUS borrowers who have borrowed for their students before July 1, 2026, can continue with the current limits until the student’s degree program ends or June 30, 2029, whichever comes first.

Loan Proration

• OBBBA includes a provision to prorate loan amounts based on enrollment level. This could mean that part-time graduate students (e.g., those enrolled less than full-time) would only be eligible for a portion of the annual loan limit. We are awaiting details about how this provision will be implemented.

New Repayment Plans

• Federal Direct loans with a first disbursement date on or after July 1, 2026 will be eligible for only two repayment plans: a restructured Standard repayment plan with a repayment period ranging from 10 to 25 years, or a new income-driven Repayment Assistance Plan (RAP) with a 30-year repayment period.  This applies to first-time Direct loan borrowers as well as those who have already borrowed for their current programs.
  
  
• Borrowers with no new loans made on or after July 1, 2026, can continue to be eligible to enroll in the current Standard, current Income Based (IBR), Graduated, and Extended repayment plans, and could also opt in to the new RAP. 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.

The Financial Aid Office will provide updates to this information as soon as it becomes available.

Updated on November 11, 2025 2:27 PM