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)

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

Less Than Full Time Registration

Students enrolled less-than-full-time will likely require proration required for enrollment less than full-time

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

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

• $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