On July 4, 2025, the One Big Beautiful Bill (OB3) Act was signed into law. As this legislation contains significant provisions that reshape federal student financial aid, the Financial Aid Office at 老司机传媒 wants to pass along information to its students and parents (both current and prospective) on what this may mean for them in regard to the upcoming 2026-2027 award year. After reading this information, should a student or parent have questions, they should reach out directly to the student鈥檚 Financial Aid Counselor or the for further assistance.
Beginning July 1, 2026, changes to the law will affect the amount professional students can borrow, the types of loans available and their repayment options after graduation.
This document is written for professional students and explains what鈥檚 changing, when it will take effect, and how it may impact them. We encourage students who are unsure how any of this applies to them to talk to 老司机传媒 Financial Aid Office before making enrollment or borrowing decisions.
Loan Options and Loan Limits
What is changing and when?
Starting July 1, 2026, the Graduate PLUS loan program will be eliminated unless students qualify for a limited exception. Students who currently depend on Graduate PLUS loans to help pay for school should be sure they know whether they qualify for the exception and what conditions could lead to the loss of Graduate PLUS eligibility.
There is a new, higher annual Direct Unsubsidized Loan limit of $50,000. There is also a new cap of $200,000 on the amount students can borrow in total (aggregate) for a professional degree program, and a new lifetime federal loan limit of $257,000 for all Federal Direct student loans (excluding Graduate or Parent PLUS loans) borrowed for all levels of study. Students who qualify for the limited exception,described below, that allows them to continue to borrow Graduate PLUS loans are also exempt from the new Direct Unsubsidized annual, aggregate, and lifetime limits.
Who is considered a professional student?
Students in the following programs are considered professional students for the purposes of federal student loan limits:
Pharmacy (Pharm.D.), Law (LLB. or J.D.), Podiatry (D.P.M., D.P., or Pod.D.), Dentistry (D.D.S. or D.M.D.), Medicine (M.D.), Theology (M.Div. or M.H.L), Veterinary Medicine (D.V.M.), Optometry (0.D.), Clinical Psychology (Psy.D. or Ph.D.), Chiropractic (D.C. or D.C.M.), Osteopathic Medicine (D.0.)
Limited exception
The law allows some students to continue borrowing from the Graduate PLUS program without being subject to the new Direct Unsubsidized aggregate and lifetime borrowing limits under a limited exception through their time to completion, for a maximum of three years.
Students may qualify for the limited exception if:
- They remain continuously enrolled in the same program of study at the same institution as they were enrolled as of June 30, 2026, AND
- They had a Direct Loan disbursed (Direct Unsubsidized or Graduate PLUS) for that same program before July 1, 2026
The limited exception also maintains the current annual limit of $20,500 for Direct Unsubsidized Loans.
Common Questions About the Elimination of Graduate PLUS and New Direct Unsubsidized loan Limits
What happens when students no longer qualify for the limited exception?
After three academic years, or earlier if the student withdraws, ceases enrollment, or completes their program of study, they no longer qualify for Graduate PLUS Loans and will become subject to the new annual, aggregate, and lifetime borrowing limits.
What options are available for students who need to borrow more than they are able through federal student loans?
If there is a gap between a student鈥檚 estimated Cost of Attendance (COA) and the institutional and/or federal aid they are eligible to receive they may reach out to the Financial Aid Office to discuss alternative funding options such as outside scholarships and/or private education loans.
New Rules Require Loan Amounts to Be Prorated for Less Than Full-Time Enrollment
If students enroll part-time in 2026-27 or future years, their federal Direct Unsubsidized and/or Graduate PLUS Loans (if they qualify to borrow a Graduate PLUS under the limited exception described above) must be prorated in accordance with changes to the law.
Students thinking of enrolling part-time or dropping a class should talk to their financial aid office first to understand the implications.
Repayment Plan Changes Apply to All Borrowers
Students who borrow a new federal Direct Loan on or after July 1, 2026, will be eligible for only two repayment plans:
- Tiered Standard Repayment
- Fixed monthly payments
- Repayment term length ranges from 10 to 25 years, based on the amount borrowed
- Repayment Assistance Plan (RAP)
- Monthly payments based on income
- Loan forgiveness after 30 years of repayment
- Is a qualifying plan for Public Service Loan Forgiveness
All federal loans must be repaid using the same repayment plan. Students with older loans (borrowed before July 1, 2026) who take out new loans on or after that date will have to repay their loans under one of the two repayment options described above.
Students who do not borrow a new federal Direct Loan on or after July 1, 2026, may continue to access current repayment options, including:
- Standard (10-year), Graduated, or Extended Repayment
- Income-Based Repayment (IBR)
- Pay As You Earn (PAYE)*
- Income-Contingent Repayment (ICR)*
*The law sunsets the PAYE and ICR plans effective July 1, 2028. Borrowers who enroll in PAYE or ICR must switch to any of the other eligible plans listed before July 1, 2028, or they will be automatically moved into RAP.
They may also access the new Repayment Assistance Plan (RAP) once it becomes available in July 2026.
Beginning July 1, 2026, changes to the law will affect the amount professional students can borrow, the types of loans available, and their repayment options after graduation.
This document is written for professional students and explains what鈥檚 changing, when it will take effect, and how it may impact them. We encourage students who are unsure how any of this applies to them to talk to 老司机传媒 Financial Aid Office before making enrollment or borrowing decisions.
Loan Options and Loan Limits
What is changing and when?
Starting July 1, 2026, the Graduate PLUS loan program will be eliminated unless students qualify for a limited exception. Students who currently depend on Graduate PLUS loans to help pay for school should be sure they know whether they qualify for the exception and what conditions could lead to the loss of Graduate PLUS eligibility.
There is a new, higher annual Direct Unsubsidized Loan limit of $20,500. There is also a new cap of $100,000 on the amount students can borrow in total (aggregate) for a graduate degree program and a new lifetime federal loan limit of $257,000 for all Federal Direct student loans (excluding Graduate or Parent PLUS loans) borrowed for all levels of study. Students who qualify for the limited exception, described below, that allows them to continue to borrow Graduate PLUS loans are also exempt from the new Direct Unsubsidized annual, aggregate, and lifetime limits.
Limited exception
The law allows some students to continue borrowing from the Graduate PLUS program without being subject to the new Direct Unsubsidized aggregate and lifetime borrowing limits under a limited exception through their time to completion, for a maximum of three years.
Students may qualify for the limited exception if:
- They remain continuously enrolled in the same program of study at the same institution as they were enrolled as of June 30, 2026, AND
- They had a Direct Loan disbursed (Direct Unsubsidized or Graduate PLUS) for that same program before July 1, 2026
The limited exception also maintains the current annual limit of $20,500 for Direct Unsubsidized Loans.
Common Questions About the Elimination of Graduate PLUS and New Direct Unsubsidized loan Limits
What happens when students no longer qualify for the limited exception?
After three academic years, or earlier if the student withdraws, ceases enrollment, or completes their program of study, they no longer qualify for Graduate PLUS Loans and will become subject to the new annual, aggregate, and lifetime borrowing limits.
What options are available for students who need to borrow more than they are able through federal student loans?
If there is a gap between a student鈥檚 estimated Cost of Attendance (COA) and the institutional and/or federal aid they are eligible to receive they may reach out to the Financial Aid Office to discuss alternative funding options such as outside scholarships and/or private education loans.
New Rules Require Loan Amounts to Be Prorated for Less Than Full-Time Enrollment
If students enroll part-time in 2026-27 or future years, their federal Direct Unsubsidized and/or Graduate PLUS Loans (if they qualify to borrow a Graduate PLUS under the limited exception described above) must be prorated in accordance with changes to the law.
Students thinking of enrolling part-time or dropping a class should talk to their financial aid office first to understand the implications.
Repayment Plan Changes Apply to All Borrowers
Students who borrow a new federal Direct Loan on or after July 1, 2026, will be eligible for only two repayment plans:
- Tiered Standard Repayment
- Fixed monthly payments
- Repayment term length ranges from 10 to 25 years, based on the amount borrowed
- Repayment Assistance Plan (RAP)
- Monthly payments based on income
- Loan forgiveness after 30 years of repayment
- Is a qualifying plan for Public Service Loan Forgiveness
All federal loans must be repaid using the same repayment plan. Students with older loans (borrowed before July 1, 2026) who take out new loans on or after that date will have to repay their loans under one of the two repayment options described above.
Students who do not borrow a new federal Direct Loan on or after July 1, 2026, may continue to access current repayment options, including:
- Standard (10-year), Graduated, or Extended Repayment
- Income-Based Repayment (IBR)
- Pay As You Earn (PAYE)*
- Income-Contingent Repayment (ICR)*
- *The law sunsets the PAYE and ICR plans effective July 1, 2028. Borrowers who enroll in PAYE or ICR must switch to any of the other eligible plans listed before July 1, 2028, or they will be automatically moved into RAP.
They may also access the new Repayment Assistance Plan (RAP) once it becomes available in July 2026
Beginning July 1, 2026, changes to the law affect how much parents can borrow from the Parent PLUS Loan program for their children鈥檚 college education and the available repayment options for those loans. There are no changes to how much undergraduate students can borrow.
New federal borrowing limits cap the Parent PLUS Loan at $20,000 per year and $65,000 in total, but the law allows for a time-limited exception to new loan limits for currently enrolled students:
- In order for Parent PLUS Loan borrowers to not be subject to the new loan limits:
- The student must remain continuously enrolled in the same program of student at the same institution as they were enrolled as of June 30, 2026, AND
- Either
- The parent borrower must have had a Parent PLUS Loan disbursed for the same program before July 1, 2026, OR
- The student must have had a Direct Loan (subsidized or unsubsidized) disbursed for that same program before July 1, 2026.
- If the above requirements are met, the new Parent PLUS Loan limits do not apply while the student is completing their program, for up to 3 years, provided the student remains continuously enrolled (i.e., does not withdraw or otherwise cease enrollment outside of scheduled breaks or non-required terms, such as summer).
- Parents of current students who do not currently meet these criteria can still qualify for this limited exception to the new loan limits if:
- The parent borrows a Parent PLUS Loan prior to July 1, 2026, OR
- The student borrows a Direct Loan (subsidized or unsubsidized) prior to July 1, 2026.
What happens when students no longer qualify for the limited exception?
After three academic years, or earlier if the student withdraws or otherwise ceases enrollment from their current school or completes their program of student, Parent PLUS Loan borrowers become subject to the new $20,000 annual and $65,000 aggregate loan limits.
What if a Parent PLUS Loan borrower needs more than the annual borrowing limit, or reaches the aggregate limit before the student graduates?
The student should speak with the 老司机传媒 Financial Aid Office regarding external scholarships or private education loans.
Repayment Plan Changes Apply to All Parent Borrowers
Any federal Parent PLUS Loans borrowed on or after July 1, 2026 (including federal consolidation loans that include Parent PLUS Loans) can only be repaid under a single new, fixed repayment plan.
What is changing?
- For Parent PLUS Loans taken out on or after July 1, 2026, the only repayment plan option available will be a new tiered standard repayment plan.
- The tiered standard repayment plan offers a fixed monthly payment over 10 to 25 years, based on the outstanding balance of the loan(s).
- This applies to parent borrowers with existing Parent PLUS Loans who borrow a new loan on or after July 1, 2026, as well, because the law requires that all Parent PLUS Loans be repaid under the same repayment plan.
- Parents who currently have Parent PLUS loans in repayment and borrow a Parent PLUS Loan on or after July 1, 2026, will have all of their Parent PLUS Loans moved to the tiered standard repayment plan, potentially changing the monthly payment amount.
- Current Parent PLUS Loan borrowers may repay their loans under the following repayment plans until their loans are fully repaid, but only if they do not borrow new Parent PLUS Loans on or after July 1, 2026:
- 10-year standard repayment plan
- Extended repayment plan
- Graduated repayment plan
- Parent PLUS Loan borrowers who consolidated their Parent PLUS Loans into a Direct Consolidation Loan before July 1, 2026, may repay their loans under the income contingent repayment (ICR) plan through June 30, 2028, at which point that plan will sunset, and Parent PLUS Loan borrowers repaying under ICR will be moved to the income-based repayment (IBR) plan.
Parents who want access to an income-driven repayment plan and/or loan forgiveness for their Parent PLUS Loans must
- Have consolidated their Parent PLUS Loans into a Direct Consolidation Loan prior to July 1, 2026 and are enrolled in the income-contingent repayment (ICR} plan prior to July 1, 2028 AND
- Not have borrowed a new Parent PLUS Loan on or after July 1, 2026.
Parent PLUS Loans and Public Service Loan Forgiveness (PSLF):
- The new tiered standard repayment plan does not count as a qualifying repayment plan for PSLF purposes. As a result, borrowing a new Parent PLUS Loan on or after July 1, 2026, prevents borrowers from receiving PSLF, even if they have already made qualifying payments, as all Parent PLUS loans must be repaid under the new tiered standard repayment plan.
- Parents who are planning to borrow a Parent PLUS Loan on or after July 1, 2026, but who want to preserve their eligibility for PSLF, may want to carefully consider other ways to help finance their dependent student's education.
| Repayment Plan Options | Forgiveness/Cancellation Options | |
|---|---|---|
| Have only borrowed Parent PLUS Loans before July 1, 2026 |
|
|
| Have only borrowed Parent PLUS Loans on/after July 1, 2026 |
|
|
| Have borrowed Parent PLUS Loans both before and after July 1, 2026 |
|
|
| Have consolidated Parent PLUS Loan(s) on/after July 1, 2026 |
|
|
*Only eligible for ICR if consolidated into Direct Consolidation Loan prior to July 1, 2026. | ||
Beginning July 1, 2026, changes to the law affect how much parents can borrow from the Parent PLUS Loan program for their children鈥檚 college education and the available repayment options for those loans. There are no changes to how much undergraduate students can borrow.
This document is written for Parent PLUS Loan borrowers and explains what鈥檚 changing, when the changes take effect, and how those changes may affect them. We encourage parents who are unsure how any of this applies to them to talk to the 老司机传媒 Financial Aid Office.
What is changing and when?
There are new loan limits for the Parent PLUS Loan program.
- $20,000per dependent student, per year (annual limit).
- $65,000 per dependent student, in total (aggregate limit).
Importance of planning accordingly
- The new aggregate limit of $65,000 means that borrowing the annual maximum for a four-year undergraduate program will cause parents to reach the aggregate limit before the student completes their degree, leaving them without further access to the Parent PLUS Loan.
- 老司机传媒 recommends only $16,250 per year as this equates to $65,000 over four years
Planning annual PLUS borrowing to ensure continued access
On the Parent PLUS Loan application, parents should only select the "maximum amount" option if they wish to borrow the full $20,000 for the year. To ensure adequate Parent PLUS Loan eligibility for the duration of the student's undergraduate program, parents should request a lesser amount on the application. For example, request $16,250 per year for total (aggregate) eligibility to be split equally for a four-year program.
What if a Parent PLUS Loan borrower needs more than the annual borrowing limit, or reaches the aggregate limit before the student graduates?
The student should speak with the 老司机传媒 Financial Aid Office regarding external scholarships or private education loans.
Repayment Plan Changes Apply to All Parent Borrowers
Any federal Parent PLUS Loans borrowed on or after July 1, 2026 (including federal consolidation loans that include Parent PLUS Loans) can only be repaid under a single new, fixed repayment plan.
What is changing?
- For Parent PLUS Loans taken out on or after July 1, 2026, the only repayment plan option available will be a new tiered standard repayment plan.
- The tiered standard repayment plan offers a fixed monthly payment over 10 to 25 years, based on the outstanding balance of the loan(s).
- This applies to parent borrowers with existing Parent PLUS Loans who borrow a new loan on or after July 1, 2026, as well, because the law requires that all Parent PLUS Loans be repaid under the same repayment plan.
- Parents who currently have Parent PLUS loans in repayment and borrow a Parent PLUS Loan on or after July 1, 2026, will have all of their Parent PLUS Loans moved to the tiered standard repayment plan, potentially changing the monthly payment amount.
- Current Parent PLUS Loan borrowers may repay their loans under the following repayment plans until their loans are fully repaid, but only if they do not borrow new Parent PLUS Loans on or after July 1, 2026:
- 10-year standard repayment plan
- Extended repayment plan
- Graduated repayment plan
- Parent PLUS Loan borrowers who consolidated their Parent PLUS Loans into a Direct Consolidation Loan before July 1, 2026, may repay their loans under the income contingent repayment (ICR) plan through June 30, 2028, at which point that plan will sunset, and Parent PLUS Loan borrowers repaying under ICR will be moved to the income-based repayment (IBR) plan.
Parents who want access to an income-driven repayment plan and/or loan forgiveness for their Parent PLUS Loans must
- Have consolidated their Parent PLUS Loans into a Direct Consolidation Loan prior to July 1, 2026 and are enrolled in the income-contingent repayment (ICR} plan prior to July 1, 2028 AND
- Not have borrowed a new Parent PLUS Loan on or after July 1, 2026.
Parent PLUS Loans and Public Service Loan Forgiveness (PSLF):
- The new tiered standard repayment plan does not count as a qualifying repayment plan for PSLF purposes. As a result, borrowing a new Parent PLUS Loan on or after July 1, 2026, prevents borrowers from receiving PSLF, even if they have already made qualifying payments, as all Parent PLUS loans must be repaid under the new tiered standard repayment plan.
- Parents who are planning to borrow a Parent PLUS Loan on or after July 1, 2026, but who want to preserve their eligibility for PSLF, may want to carefully consider other ways to help finance their dependent student's education.
| Repayment Plan Options | Forgiveness/Cancellation Options | |
|---|---|---|
| Have only borrowed Parent PLUS Loans before July 1, 2026 |
|
|
| Have only borrowed Parent PLUS Loans on/after July 1, 2026 |
|
|
| Have borrowed Parent PLUS Loans both before and after July 1, 2026 |
|
|
| Have consolidated Parent PLUS Loan(s) on/after July 1, 2026 |
|
|
*Only eligible for ICR if consolidated into Direct Consolidation Loan prior to July 1, 2026. | ||
