One Big Beautiful Bill Act (OBBBA)
What You Need to Know
Last updated: December 17, 2025
On July 4, 2025, President Trump signed a reconciliation bill (the "One Big Beautiful Bill Act", or OBBBA) which contains many changes to federal financial aid programs that are set to go into effect on July 1, 2026. While the final rules and regulations have not yet been released, we are actively reviewing the legislation and will continue to share updates as additional guidance becomes available from the U.S. Department of Education and other relevant authorities.
Parent and Graduate PLUS Loans
Federal Loan Limits
Loan Prorations
Federal Loan Repayment
Federal Needs Analysis
What Does This Mean?
What's Next?
Parent and Graduate PLUS Loans:
- Caps on Parent PLUS Loan Funding
- All parents may borrow up to $20,000 per year per dependent student, with a $65,000 lifetime aggregate limit per dependent student (without regard to amounts forgiven, repaid, canceled, or discharged.
- The maximum amount is per student, not per parent.
- All parents may borrow up to $20,000 per year per dependent student, with a $65,000 lifetime aggregate limit per dependent student (without regard to amounts forgiven, repaid, canceled, or discharged.
- Elimination of the Graduate PLUS loan for all graduate and professional students.
- Starting July 1, 2026, new borrowers will no longer be eligible for the federal Grad PLUS Loan.
- However, if you are enrolled in your current program and have received a disbursement of a federal Direct loan for your current program of study (including Direct unsubsidized loans or Graduate PLUS loans) loan before July 1, 2026, you will still be able to access Grad PLUS for up to three additional years or until your program ends—whichever comes first.
- This “legacy clause” applies only to loans borrowed for your current program. If you borrowed federal loans for a previous program and start a new one after July 1, 2026, you won’t be eligible for the PLUS loan in your new program.
- Students must remain continuously enrolled to maintain eligibility under the legacy clause. Withdrawals or leaves of absence for any reason may result in forfeiture of legacy status.
- Starting July 1, 2026, new borrowers will no longer be eligible for the federal Grad PLUS Loan.
Federal Loan Limits:
- New Graduate Loan Limits: an annual limit of $20,500 for graduate students and $50,000 for professional students. The aggregate borrowing limit is capped at $100,000 for graduate students and $200,000 for professional students, not including any undergraduate borrowing.
- However, if you are enrolled in your current program and have received a disbursement of a federal Direct loan for your current program of study (including Direct unsubsidized loans or Graduate PLUS loans) loan before July 1, 2026, you will still be able to access federal loans at the current levels, including access to the Grad PLUS for up to three additional years or until your program ends—whichever comes first.
- This “legacy clause” applies only to loans borrowed for your current program. If you borrowed federal loans for a previous program and start a new one after July 1, 2026, you won’t be eligible for the PLUS loan in your new program.
- Students must remain continuously enrolled to maintain eligibility under the legacy clause. Withdrawals or leaves of absence for any reason may result in forfeiture of legacy status.
- Under the new bill, a professional degree is a degree that signifies both completion of the academic requirements for beginning practice in a given profession, and a level of professional skill beyond that normally required for a bachelor’s degree; is generally at the doctoral level, and requires at least six academic years of postsecondary education coursework for completion, including at least two years of postbaccalaureate level coursework; generally requires professional licensure to begin practice; and includes a four-digit program CIP code in the same intermediate group as the following fields: Pharmacy (Pharm.D.), Dentistry (D.D.S. or D.M.D.), Veterinary Medicine (D.V.M.), Chiropractic (D.C. or D.C.M.), Law (L.L.B. or J.D.), Medicine (M.D.), Optometry (O.D.), Osteopathic Medicine (D.O.), Podiatry (D.P.M., D.P., or Pod.D.), Theology (M.Div., or M.H.L.), and Clinical Psychology (Psy.D. or Ph.D.).
- A professional student may not receive title IV aid as an undergraduate student for the same period of enrollment; and must be enrolled in a program leading to a professional degree.
- It is our understanding based on the current draft bill that students will not be able to opt out of legacy eligibility.
Loan Proration:
- Loan proration for less than full-time enrollment
- Students who are enrolled less than full-time over the course of an academic year will have their loan eligibility prorated in direct proportion to the percent of full-time status for which the student is enrolled.
Federal Loan Repayment:
- Repayment plan options for new student loans (Direct Subsidized, Direct Unsubsidized, Graduate PLUS) disbursed on or after July 1, 2026 (not including Parent PLUS):
- Creation of a new Income-Driven Repayment Plan, called the Repayment Assistance Plan, or RAP.
- The new RAP plan stipulates that if married and filing separately, a student’s spouse’s AGI and number of dependents are not included in the payment calculation.
- RAP has a minimum monthly payment of $10, but payment is based on 1-10% of income based on AGI over a 30-year repayment term.
- Students with dependents receive $50 off the monthly payment amount per dependent.
- This plan eliminates negative amortization as any unpaid interest after payment is subsidized.
- There is no cap on a student’s monthly payment outside of the 10% of income based on AGI, even if the payment exceeds the amount required under a standard repayment plan.
- If a borrower makes an on-time payment that reduces their principal by less than $50, ED will make a payment to principal, up to the amount paid, minus what was applied to the principal, or $50, whichever is less.
- Any new loans first disbursed on or after July 1, 2026 (including loans for students eligible under the legacy clause), can be repaid using only one of two plans: a new standard repayment plan with fixed monthly payments and fixed terms ranging from 10 to 25 years based on the amount borrowed or RAP.
- Current borrowers with no new loans first disbursed on or after July 1, 2026 are eligible to enroll in the current Standard, Graduated, Extended or current income-driven repayment plans, including IBR, ICR or PAYE, until June 30, 2028. No new enrollments under these plans are allowed after July 1, 2028.
- Students may remain enrolled in IBR indefinitely, but all students enrolled in ICR or PAYE must transition to a different repayment plan (Current IBR, standard or RAP) but July 1, 2028. If no selection is made by that date, students will be moved to RAP automatically.
- Repayment plan options for Parent PLUS Loans and Consolidation Loans
- Consolidation loans made on or after July 1, 2026 are only eligible for repayment under RAP or the standard repayment plans.
- A consolidation loan taken out by a borrower before July 1, 2026 is treated like any other eligible loan. Borrowers currently in an income-driven plan have until July 1, 2028 to select a standard plan, IBR or RAP.
- If the consolidation loan was used to pay off a Parent PLUS loan, I must enter repayment under ICR before July 1, 2028 to become eligible for IBR.
- If the borrower takes no action by that date, all eligible loans will automatically be moved to RAP and any loans not eligible for RAP will be placed into IBR.
- All new Parent PLUS loans first disbursed on or after July 1, 2026 must be repaid under the standard repayment plan- they are not eligible for RAP. If a borrower chooses RAP but has an ineligible loan, they must repay the ineligible loan separately.
- Loan Rehabilitation Terms
- Borrowers can rehabilitate a defaulted loan twice, instead of once as currently allowed. The minimum rehab payment for Direct Loans changes to $10.
- Loan Deferment Options:
- Borrowers with loans made on or before July 1, 2027 are still able to use economic hardship and unemployment deferments as outlined in the master promissory note. Once all borrower’s loans made prior to July 1, 2027 are paid in full, economic hardship and unemployment deferments will cease to exist.
- New borrowers with loans first disbursed on or after July 1, 2027 will not be eligible for those deferment options.
- Loan Forbearance Options:
- Loans first disbursed on or before June 30, 2027 are eligible for a forbearance up to 12 months at a time, with a cumulative limit of three years.
- Loans first disbursed on or after July 1, 2027 are eligible for forbearance for up to nine months in any two-year period.
Federal Need Analysis Calculation Changes:
- Requires that foreign income be included in the adjusted gross income used to calculate Pell grant eligibility
- Students who receive grants and scholarships from non-federal sources, covering their entire cost of attendance (COA) are ineligible to receive a Pell grant, even if otherwise eligible for the program.
- Students with a calculated Student Aid Index (SAI) that exceeds twice the maximum Pell Grant award will be ineligible for Pell.
Based on current information from the U.S. Department of Education, federal loan programs and borrowing rules remain unchanged for the current 2025-2026 academic year and will allow current students to borrow under current loan limits.
What Does this Mean?
These changes mean it’s more important than ever to understand how you plan to pay for your degree. It may also mean that many students will need to rely on other resources, such as installment plans, outside scholarships, or private loan borrowing, to help cover any remaining educational costs after federal aid eligibility has been exhausted.
Please visit the following links for more information:
- Additional scholarship resources
- Installment Plans
- Private loans
- Assistantships and Fellowships
- Federal Work-Study
What’s Next?
Loyola University Chicago’s Financial Aid Office continues to review the bill’s contents and will provide additional guidance below as we learn more from the Department of Education.
Our office is closely tracking all of these changes and will be updating this site to help students and alumni understand what these changes may mean for their financial aid. As soon as we have more concrete answers from ED, we’ll post updates.
In the meantime:
- There is no change to financial aid for the 2025–26 academic year.
- We understand this is a lot to take in, and we’re here to support you as we all learn more.
The National Association of Student Financial Aid Administrators (NASFAA) has put together a helpful chart that reviews all the provisions of the reconciliation bill. That can be found here
What You Need to Know
Last updated: December 17, 2025
On July 4, 2025, President Trump signed a reconciliation bill (the "One Big Beautiful Bill Act", or OBBBA) which contains many changes to federal financial aid programs that are set to go into effect on July 1, 2026. While the final rules and regulations have not yet been released, we are actively reviewing the legislation and will continue to share updates as additional guidance becomes available from the U.S. Department of Education and other relevant authorities.
Parent and Graduate PLUS Loans
Federal Loan Limits
Loan Prorations
Federal Loan Repayment
Federal Needs Analysis
What Does This Mean?
What's Next?
Parent and Graduate PLUS Loans:
- Caps on Parent PLUS Loan Funding
- All parents may borrow up to $20,000 per year per dependent student, with a $65,000 lifetime aggregate limit per dependent student (without regard to amounts forgiven, repaid, canceled, or discharged.
- The maximum amount is per student, not per parent.
- All parents may borrow up to $20,000 per year per dependent student, with a $65,000 lifetime aggregate limit per dependent student (without regard to amounts forgiven, repaid, canceled, or discharged.
- Elimination of the Graduate PLUS loan for all graduate and professional students.
- Starting July 1, 2026, new borrowers will no longer be eligible for the federal Grad PLUS Loan.
- However, if you are enrolled in your current program and have received a disbursement of a federal Direct loan for your current program of study (including Direct unsubsidized loans or Graduate PLUS loans) loan before July 1, 2026, you will still be able to access Grad PLUS for up to three additional years or until your program ends—whichever comes first.
- This “legacy clause” applies only to loans borrowed for your current program. If you borrowed federal loans for a previous program and start a new one after July 1, 2026, you won’t be eligible for the PLUS loan in your new program.
- Students must remain continuously enrolled to maintain eligibility under the legacy clause. Withdrawals or leaves of absence for any reason may result in forfeiture of legacy status.
- Starting July 1, 2026, new borrowers will no longer be eligible for the federal Grad PLUS Loan.
Federal Loan Limits:
- New Graduate Loan Limits: an annual limit of $20,500 for graduate students and $50,000 for professional students. The aggregate borrowing limit is capped at $100,000 for graduate students and $200,000 for professional students, not including any undergraduate borrowing.
- However, if you are enrolled in your current program and have received a disbursement of a federal Direct loan for your current program of study (including Direct unsubsidized loans or Graduate PLUS loans) loan before July 1, 2026, you will still be able to access federal loans at the current levels, including access to the Grad PLUS for up to three additional years or until your program ends—whichever comes first.
- This “legacy clause” applies only to loans borrowed for your current program. If you borrowed federal loans for a previous program and start a new one after July 1, 2026, you won’t be eligible for the PLUS loan in your new program.
- Students must remain continuously enrolled to maintain eligibility under the legacy clause. Withdrawals or leaves of absence for any reason may result in forfeiture of legacy status.
- Under the new bill, a professional degree is a degree that signifies both completion of the academic requirements for beginning practice in a given profession, and a level of professional skill beyond that normally required for a bachelor’s degree; is generally at the doctoral level, and requires at least six academic years of postsecondary education coursework for completion, including at least two years of postbaccalaureate level coursework; generally requires professional licensure to begin practice; and includes a four-digit program CIP code in the same intermediate group as the following fields: Pharmacy (Pharm.D.), Dentistry (D.D.S. or D.M.D.), Veterinary Medicine (D.V.M.), Chiropractic (D.C. or D.C.M.), Law (L.L.B. or J.D.), Medicine (M.D.), Optometry (O.D.), Osteopathic Medicine (D.O.), Podiatry (D.P.M., D.P., or Pod.D.), Theology (M.Div., or M.H.L.), and Clinical Psychology (Psy.D. or Ph.D.).
- A professional student may not receive title IV aid as an undergraduate student for the same period of enrollment; and must be enrolled in a program leading to a professional degree.
- It is our understanding based on the current draft bill that students will not be able to opt out of legacy eligibility.
Loan Proration:
- Loan proration for less than full-time enrollment
- Students who are enrolled less than full-time over the course of an academic year will have their loan eligibility prorated in direct proportion to the percent of full-time status for which the student is enrolled.
Federal Loan Repayment:
- Repayment plan options for new student loans (Direct Subsidized, Direct Unsubsidized, Graduate PLUS) disbursed on or after July 1, 2026 (not including Parent PLUS):
- Creation of a new Income-Driven Repayment Plan, called the Repayment Assistance Plan, or RAP.
- The new RAP plan stipulates that if married and filing separately, a student’s spouse’s AGI and number of dependents are not included in the payment calculation.
- RAP has a minimum monthly payment of $10, but payment is based on 1-10% of income based on AGI over a 30-year repayment term.
- Students with dependents receive $50 off the monthly payment amount per dependent.
- This plan eliminates negative amortization as any unpaid interest after payment is subsidized.
- There is no cap on a student’s monthly payment outside of the 10% of income based on AGI, even if the payment exceeds the amount required under a standard repayment plan.
- If a borrower makes an on-time payment that reduces their principal by less than $50, ED will make a payment to principal, up to the amount paid, minus what was applied to the principal, or $50, whichever is less.
- Any new loans first disbursed on or after July 1, 2026 (including loans for students eligible under the legacy clause), can be repaid using only one of two plans: a new standard repayment plan with fixed monthly payments and fixed terms ranging from 10 to 25 years based on the amount borrowed or RAP.
- Current borrowers with no new loans first disbursed on or after July 1, 2026 are eligible to enroll in the current Standard, Graduated, Extended or current income-driven repayment plans, including IBR, ICR or PAYE, until June 30, 2028. No new enrollments under these plans are allowed after July 1, 2028.
- Students may remain enrolled in IBR indefinitely, but all students enrolled in ICR or PAYE must transition to a different repayment plan (Current IBR, standard or RAP) but July 1, 2028. If no selection is made by that date, students will be moved to RAP automatically.
- Repayment plan options for Parent PLUS Loans and Consolidation Loans
- Consolidation loans made on or after July 1, 2026 are only eligible for repayment under RAP or the standard repayment plans.
- A consolidation loan taken out by a borrower before July 1, 2026 is treated like any other eligible loan. Borrowers currently in an income-driven plan have until July 1, 2028 to select a standard plan, IBR or RAP.
- If the consolidation loan was used to pay off a Parent PLUS loan, I must enter repayment under ICR before July 1, 2028 to become eligible for IBR.
- If the borrower takes no action by that date, all eligible loans will automatically be moved to RAP and any loans not eligible for RAP will be placed into IBR.
- All new Parent PLUS loans first disbursed on or after July 1, 2026 must be repaid under the standard repayment plan- they are not eligible for RAP. If a borrower chooses RAP but has an ineligible loan, they must repay the ineligible loan separately.
- Loan Rehabilitation Terms
- Borrowers can rehabilitate a defaulted loan twice, instead of once as currently allowed. The minimum rehab payment for Direct Loans changes to $10.
- Loan Deferment Options:
- Borrowers with loans made on or before July 1, 2027 are still able to use economic hardship and unemployment deferments as outlined in the master promissory note. Once all borrower’s loans made prior to July 1, 2027 are paid in full, economic hardship and unemployment deferments will cease to exist.
- New borrowers with loans first disbursed on or after July 1, 2027 will not be eligible for those deferment options.
- Loan Forbearance Options:
- Loans first disbursed on or before June 30, 2027 are eligible for a forbearance up to 12 months at a time, with a cumulative limit of three years.
- Loans first disbursed on or after July 1, 2027 are eligible for forbearance for up to nine months in any two-year period.
Federal Need Analysis Calculation Changes:
- Requires that foreign income be included in the adjusted gross income used to calculate Pell grant eligibility
- Students who receive grants and scholarships from non-federal sources, covering their entire cost of attendance (COA) are ineligible to receive a Pell grant, even if otherwise eligible for the program.
- Students with a calculated Student Aid Index (SAI) that exceeds twice the maximum Pell Grant award will be ineligible for Pell.
Based on current information from the U.S. Department of Education, federal loan programs and borrowing rules remain unchanged for the current 2025-2026 academic year and will allow current students to borrow under current loan limits.
What Does this Mean?
These changes mean it’s more important than ever to understand how you plan to pay for your degree. It may also mean that many students will need to rely on other resources, such as installment plans, outside scholarships, or private loan borrowing, to help cover any remaining educational costs after federal aid eligibility has been exhausted.
Please visit the following links for more information:
- Additional scholarship resources
- Installment Plans
- Private loans
- Assistantships and Fellowships
- Federal Work-Study
What’s Next?
Loyola University Chicago’s Financial Aid Office continues to review the bill’s contents and will provide additional guidance below as we learn more from the Department of Education.
Our office is closely tracking all of these changes and will be updating this site to help students and alumni understand what these changes may mean for their financial aid. As soon as we have more concrete answers from ED, we’ll post updates.
In the meantime:
- There is no change to financial aid for the 2025–26 academic year.
- We understand this is a lot to take in, and we’re here to support you as we all learn more.
The National Association of Student Financial Aid Administrators (NASFAA) has put together a helpful chart that reviews all the provisions of the reconciliation bill. That can be found here