One Big Beautiful Bill Act (OBBB) – Federal Student Loan Updates

Modified on Tue, Mar 17 at 3:52 PM

TABLE OF CONTENTS

What We Know (As of February 2026)
What Remains Unclear
Options to Consider

Enacted in July 2025, the One Big Beautiful Bill Act (OBBB) made significant changes to federal student loan programs as part of broader federal fiscal policy shifts. Most changes outlined in this legislation are scheduled to take effect July 1, 2026.

Lesley University is actively monitoring federal guidance and will update this page as additional clarification from the U.S. Department of Education (ED) becomes available.

Disclaimer: The information on this page is provided by Lesley University’s Office of Student Financial Services to assist students in understanding changes to federal student loan programs. This content reflects our current understanding of evolving federal standards and is not official federal guidance. Students should refer to federal sources for official information, including studentaid.gov.

What We Know (As of February 2026)

Continuous Enrollment

Continuous enrollment is required to maintain the Federal Legacy Provision exemptions. Should a student withdraw or cease enrollment for any reason, the student foregoes exemptions and their loan status and limits revert to the Federal Non-Legacy requirements.

Grad PLUS Loans

Grad PLUS loans will be phased out beginning July 1, 2026.
New Grad PLUS loans will not be available to new borrowers after that date.
Existing Grad PLUS borrowers who meet the Federal Legacy Provisions may retain eligibility as they complete their current programs.

New Graduate Unsubsidized Direct Loan Limits (Effective July 1, 2026)

Up to $20,500 per year
$100,000 aggregate graduate borrowing limit (excludes undergrad federal loans and Grad PLUS loans)
Existing Unsubsidized Loan borrowers who meet the Federal Legacy Provisions may continue borrowing under current limits until the expected time to credential or for up to three additional years (whichever occurs first). Current lifetime limit is $138,500 which includes undergraduate federal student loans.

Undergraduate Loans & Parent PLUS Loans

Undergraduate Loans

No changes to annual undergraduate loan limits.
There will be changes in loan eligibility based on enrollment. See Loan Proration below.

Parent PLUS Loans (Effective July 1, 2026)

$20,000 per student per year
$65,000 lifetime limit per dependent student
Existing Parent PLUS borrowers (who borrowed prior to July 1, 2026) may continue under current limits for up to three additional years or until the student completes their program, whichever comes first. Currently there is no lifetime limit on the Parent Plus Loan.

Public Service Loan Forgiveness (PSLF)

No changes to PSLF under the OBBB.
Separate regulatory proposals regarding PSLF eligibility have been introduced but are not part of this legislation.

What Remains Unclear

Grad PLUS Loans for Existing Borrowers

Current indications suggest that students who borrow any Direct Loan or Grad PLUS before July 1, 2026, may retain Grad PLUS eligibility for up to three additional years or until the expected time to completion—provided they continually remain enrolled in the same program at the same institution.
Further guidance from ED is pending.

Loan Proration for Part-Time Students

The legislation includes provisions to prorate loan eligibility based on enrollment status.
Part-time graduate students may be eligible for only a portion of the annual loan limit.
Clarification is still pending regarding how proration will apply to both graduate and undergraduate students.

New Repayment Plans

For loans disbursed on or after July 1, 2026:

Current income-driven repayment plans (IBR, PAYE, SAVE) will be eliminated for new loans.
A new Repayment Assistance Program (RAP) will replace them.
Standard repayment plans will continue (10–25 years).

Additional Repayment Details

Borrowers with both pre- and post-July 1, 2026, loans must use RAP or Standard plans for new loans.
RAP borrowers may switch to a Standard plan at any time.
Borrowers with no new loans after July 1, 2026, may remain eligible for current Standard, IBR, Graduated, and Extended plans and may opt into RAP.
Borrowers currently enrolled in ICR, PAYE, or SAVE must transition to a new repayment plan by July 1, 2028. If no selection is made, they will automatically be placed into RAP.
Additional RAP details are forthcoming.

Additional Resources

For official updates and policy details, please visit:

National Association of Independent Colleges & Universities (NAICU)
National Association of Student Financial Aid Administrators (NASFAA)
One Big Beautiful Bill Act Updates (Federal Student Aid)
Federal Student Loan Program Provisions Effective Upon Enactment Under the One Big Beautiful Bill Act (GEN-25-04)

Options to Consider

Given the changes to federal loan programs—both finalized and pending—students and families are encouraged to review all available financing options. The list below is not exhaustive.

Payment Plan

Lesley offers convenient monthly payment plans:

2 to 6 months per semester
Payments due on the 15th of each month
Enroll in payment plans via Self Service

Non-Profit Educational Loans

MEFA and RISLA are state-run, non-profit organizations.
Offer competitive educational financing options.
May provide lower interest rates than Federal PLUS loans.

Private Lender Loans

ELM Select allows students and families to compare private lenders.
Lenders provide detailed terms and interest rates.

Federal PLUS Loan

Available to eligible students and families.
New lifetime cap of approximately $60,000 for an undergraduate student’s program.
Typically, less restrictive credit qualifications than many private lenders.