Key Changes from OBBBA
(Last updated: July 2, 2026)
The One Big Beautiful Bill Act (OBBBA), also known as the "Working Families Tax Cuts" Act and 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 an in-person or virtual appointment with a financial aid advisor, email us or call us at 740.593.4141. You can also review Frequently Asked Questions from the U.S. Department of Education. 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 OBBBA provisions took effect July 1, 2026, for the 2026-2027 academic year. Colleges and universities have been modifying their financial aid systems to align with the law and U.S. Department of Education guidance. Modifications and testing may delay the disbursement of federal financial aid.
Supporting Students
OHIO is working to ensure that fall semester aid is applied to student accounts as quickly as possible. Because of the scope of federal changes and the timing of federal guidance, technical system updates are still ongoing and have delayed some aspects of financial aid processing.
OHIO would typically disburse fall semester aid 10 days prior to the start of the semester (August 14). Because of required technical system updates, OHIO will post aid to student accounts on August 18, and families will be able to view the aid amount in the MyOHIO Student Center then. Refunds will begin on August 24 as planned.
OHIO is committed to supporting students as OBBBA changes are implemented. Late fees have been suspended in the summer months for students whose aid has been impacted by OBBBA. Students who continue to experience aid-related delays may contact the Office of Student Financial Aid and Scholarships for assistance.
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.
Less-Than-Full-Time Enrollment
Enrollment less than full-time will reduce loan eligibility. Undergraduate students enrolled less than full-time (12 hours) for a semester will have their subsidized and unsubsidized loans reduced 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 are effective as of July 1, 2026. Parents who have previously borrowed a PLUS Loan for their OHIO student or are applying for a PLUS Loan for a student who has previously borrowed a Federal Direct Loan may continue borrowing under prior rules as an exception. This exception is available 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.
Graduate PLUS 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.
Less-Than-Full-Time Enrollment
Federal Unsubsidized and Graduate PLUS loans will be reduced for students enrolled less than full-time (9 hours) for a semester. 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.
"Professional" Degree Classification
The act created a new “professional” graduate degree program classification, which provides higher loan limits. OHIO offers doctoral degrees in osteopathic medicine and clinical psychology, which are among the degree programs initially identified as professional degree programs. Some programs are temporarily classified as professional after a recent court ruling. Ohio University is temporarily restricting loan limits by program, as litigation is ongoing and final guidance remains uncertain. Loan limits for all Ohio University graduate programs, except Osteopathic Medicine and Clinical Psychology, remain at $20,500 at this time. The Office of Student Financial Aid and Scholarships is actively monitoring litigation and federal guidance and will notify affected first-year students of any changes in loan eligibility as soon as possible.
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.
| Student Type | Annual Limit | Aggregate Limit | Lifetime Limit |
|---|---|---|---|
| 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.