Changes to Federal Financial Aid Programs

Background

• On July 4, 2025, the One Big Beautiful Bill Act (OBBBA) was signed into law, creating significant changes to access to federal financial aid programs.
• Multiple provisions impacting higher education -federal student aid and beyond, most effective 7/1/2026 for award year 2026-27
• Please note: as information changes from the Department of Education, updated messaging will be provided here

Federal Loan Borrowers Before 7/1/2026

If you borrowed a Federal Direct Loan (Unsubsidized and/or Graduate PLUS) that disburses before July 1, 2026, you will be entitled to borrow loans at the current borrowing levels (both annual and lifetime) for a prescribed period of time.

Below are tables outlining the length of legacy borrowing protection for students in two-and-four-year programs. Please be advised that this information could be updated:

Other considerations:

• Students enrolled less-than-full-time may not be eligible to borrow Graduate PLUS Loans past the expected time of credential in above metric
• Students who take a leave of absence will not be able to borrow past Spring 2029, even if they have not completed their program at a full-time enrollment by that time.
• Students in programs beyond four years will lose legacy protections after three years (Spring 2029)

Leaves of Absences or Withdrawals from Programs

Any students who are on a leave of absence (LOA) or withdraw from their program on or after July 1, 2026, will lose any legacy borrowing protections, even if they return to the same program during the window of legacy borrowing protection.

Program Specific Guidance

Graduate PLUS Loans

• No new Graduate PLUS Loan borrowers will be allowed after July 1, 2026
• Legacy protections will be extended to Graduate PLUS Loan borrowers who meet the following stipulations:
  • A student is enrolled in a graduate/professional program AND;
  • Has borrowed Federal Direct Loans for the same program before July 1, 2026
• Students granted legacy protection will be able to borrow Graduate PLUS Loans for “expected time to credential” or three academic years, whichever is shorter
• Expected time to credential is the difference between program length (at full time enrollment, as published by your school/college) and period of study completed by the student

Federal Unsubsidized Loans

Effective July 1, 2026, new annual and lifetime borrowing limits will be enacted:

• Graduate Unsubsidized (GMS/SPH/GSDM Post-Doc):
  • $20,500 annual
  • $100,000 lifetime
• Professional Unsubsidized (CAMED MD/GSDM DMD/GSDM AS)
  • $50,000 annual
  • $200,000 lifetime
• Lifetime Aggregate -excluding parent PLUS: $257,000

Legacy Federal Unsubsidized Loans borrowers will be granted protection to borrow the same annual and aggregate limits as before, as long as:

• A student is enrolled in a graduate/professional program AND;
• Has disbursed borrowed Graduate PLUS Loans for the same program before July 1, 2026
• Legacy annual limits vary per program, and year of study. The SFS Federal Student Loan webpage provides full legacy limits per program

Students can utilize Private Credit-Based Loans to cover any expenses not covered by federal loans (unsubsidized or PLUS). Please visit the Credit-Based Loans page for further information on how to research and apply. 

Less Than Full Time Registration

Students enrolled less-than-full-time will likely require proration of their loans according to their less than full-time enrollment

• Loan proration will be in “direct proportion to enrollment status” rounded to nearest percentage

For example, if a graduate student is registered half-time, a student’s eligibility for federal student loans will be reduced by half or 50%

• $20,500 maximum FT borrowing
• $10,250 maximum half-time (50%) borrowing

Final rules for the implementation of less-than-full-time loan proration has not been published by the US Department of Education