Key Changes from OBBBA
The One Big Beautiful Bill Act (OBBBA), which was signed into law on July 4, 2025, made significant changes to federal student financial aid programs.
OHIO will be flexible with students and families and provide options as we navigate the challenges of implementing this new legislation. More information is coming soon about how OHIO will support families. We're happy to talk with you and your family about any questions you have. Please sign up for a virtual appointment with a financial aid advisor, email us or call us at 740.593.4141. Ohio University’s Office of Student Financial Aid and Scholarships will continue to update this page to keep you informed.
Scope of OBBBA
- The act modified federal student loans, repayment options, Parent PLUS loans and certain FAFSA and Pell Grant rules, while also adding a new accountability measure for institutions.
- Prospective and current undergraduate, graduate and professional students may be impacted.
- Changes affect new borrowers and legacy borrowers differently. An undergraduate student is a legacy borrower if they received a federal Direct or PLUS loan disbursement for a bachelor's program before July 1, 2026, and remain enrolled in any bachelor's degree program. Graduate students can only qualify for legacy borrower status if they remain enrolled in the same graduate program.
- The act dictates annual, aggregate and (new) lifetime loan limits. Annual loan limits apply to an academic year (including summer). An aggregate loan limit is the maximum amount of outstanding principal a student can owe in specific federal loans at any given time. A lifetime loan limit is the total amount of federal loans an individual can ever borrow under Higher Education Act (HEA) programs.
Timeline
Many of the provisions take effect July 1, 2026, for the 2026-2027 academic year; however, because summer semester begins the financial aid year at OHIO, students enrolling for summer 2026 terms will be the first to be affected by OBBBA.
Final guidance on implementation is expected from the U.S. Department of Education later this summer. Colleges and universities must then modify their financial aid systems to align with the guidance and perform testing, which may delay the disbursement of federal financial aid.
Federal Student Loans
Undergraduate students may still receive Federal Direct Subsidized Loans and Unsubsidized Loans, and there were no changes to annual loan limits. The act did create a new lifetime loan limit of $257,500 across all levels of study, including undergraduate, graduate, and professional loans. Undergraduate students whose future plans may include graduate school should keep the new lifetime loan limit in mind. In addition, enrollment less than full-time may reduce loan eligibility. Undergraduate students enrolled less than full-time (12 hours) for a semester will have their subsidized and unsubsidized loans prorated based on annual credit hours.
Parent PLUS Loans
Parents of undergraduate students are subject to new limits on Parent PLUS loans.
- Annual limit: $20,000 per dependent student
- Lifetime limit: $65,000 for each dependent student.
These limits apply to all parents combined. For example, two parents borrowing for the same student may only borrow up to $20,000 total for the academic year.
The Parent PLUS loan rules apply to new borrowers as of July 1, 2026. Parents who have taken out a PLUS Loan for a student prior to July 1 may continue borrowing under prior rules for up to three additional academic years or until program completion, whichever comes first.
Free Application for Federal Student Aid
OBBBA made changes that affect eligibility for the federal Pell Grant.
- Students whose non-federal financial aid covers their full cost of attendance may no longer be eligible for a Pell Grant.
- In addition, students are not eligible for a Pell Grant if their Student Aid Index (SAI) exceeds twice the maximum Pell Grant Award ($7,395 for the 2026-2027 academic year).
- The act reinstates the exemptions for family farm and family-owned small business assets and expands the exemption to family-owned commercial fisheries in the 2026-2027 FAFSA.
- In addition, the act requires that foreign earned income is included when calculating Pell Grant eligibility.
Federal Loans
The biggest change for graduate students is that OBBBA eliminated Graduate PLUS Loans for new borrowers as of July 1. Legacy borrowers may continue borrowing under prior rules (up to full cost of attendance) for up to three additional academic years or until program completion, whichever comes first. However, if the student is enrolled less than full-time (9 hours) for a semester, Federal Unsubsidized and Graduate PLUS loans will also be prorated. Students who continue to be enrolled in their program longer than the published length of time to completion will lose legacy status. For example, a student enrolled in a graduate program with a published length of two years, will not be eligible for a Graduate PLUS loan if enrolled longer than two years.
The act created a new “professional” graduate degree program classification, which provides higher loan limits. OHIO offers doctoral degrees in osteophathic medicine and clinical psychology, which are among the 11 degree programs identified as professional degree programs in the act. Final federal regulations will confirm the professional degree programs.
Annual, Aggregate, and Lifetime Limits
Graduate and professional students may still receive Federal Direct Unsubsidized Loans subject to annual and aggregate limits.
The chart below provides annual and aggregate loan limits for graduate students and the newly defined professional students. Undergraduate loans are not included in these aggregate limits.
| Annual | Aggregate | Lifetime | |
|---|---|---|---|
| Graduate Student | $20,500 (no change) | $100,000 | $257,500 |
| Professional Graduate Student | $50,000 | $200,000 | $257,500 |
The new lifetime loan limit of $257,500 includes undergraduate, graduate, and professional loans.
Repayment Plans
OBBBA modified repayment plans for new and continuing student borrowers.
- New tiered Standard Repayment Plan (fixed payments over 10–25 years)
- New Repayment Assistance Plan (income-based with a $10 minimum payment)
- Elimination of income-contingent repayment plans in 2028
Current student borrowers have options for switching plans or opting into new plans.
Consolidation loans may use the Standard Repayment Plan or Repayment Assistance Plan, but all new Parent PLUS loans are limited to the Standard Repayment Plan.