The One Big Beautiful Bill Act (OB3) is the budget reconciliation package that was approved by Congress on July 4, 2025, to ensure continued funding for many federal expenditures. While it includes a broad range of topics and policy changes, we are focusing specifically on the aspects that impact Federal Student Aid, effective the 2026-2027 academic year, beginning July 1, 2026. The OB3 introduces various changes that will impact all categories of students, including prospective, undergraduate, graduate and professional. We will highlight some of the changes in each section below, but please note, we are still waiting for clarity from the Department of Education as to how, when and for whom the changes in OB3 will go into effect.
Changes to Student Federal Aid Beginning July 1, 2026
Enrollment & Recalculated Loan Eligibility
While there are no changes to the annual amount which students can borrow as undergraduate or graduate students, eligibility for part-time student loan borrowers will be prorated based on the enrollment status according to the student’s academic level (freshman, sophomore, etc.). An undergraduate student is typically expected to enroll in 12 credit hours or more per semester for a total of 24 credit hours during the fall/spring academic period. An undergraduate student enrolled in 12+ credit hours for the fall semester would be eligible for 50 percent of the annual loan limit. A graduate student is typically expected to enroll in 9 credit hours or more per semester for a total of 18 hours during the fall/spring academic period. A graduate student enrolled in 9+ credit hours for the fall semester would be eligible for 50% of the annual loan limit. To qualify for federal loans, students must still meet the minimum half-time enrollment requirement based on their academic level.
Undergraduate enrolled in less than full-time enrollment calculation:
| Undergraduate Enrollment | % of the Annual Loan Limit |
|---|---|
|
12+
|
50.00%
|
|
11
|
45.83%
|
|
10 |
41.67% |
|
9 |
37.50% |
|
8 |
33.33% |
|
7 |
29.17% |
|
6 |
25.00% |
|
5 - 1 |
0% |
Graduate enrolled in less than full-time enrollment calculation:
| Graduate Enrollment | % of the Annual Loan Limit |
|---|---|
|
9+ |
50.00% |
|
8 |
44.44% |
|
7 |
38.89% |
|
6 |
33.33% |
|
5 |
27.78% |
|
4.5 |
25.00% |
|
4 - 1 |
0% |
Dropping or withdrawing from a course may reduce federal loan eligibility. Students should check with an academic advisor before making changes to their course schedule.
Loan
Beginning in the 2026-2027 academic year, there will be changes to the Federal Direct Loans program that will have impact on all student borrowers, mainly graduate and professional students as well as parents of undergraduate dependent students. If you are planning to borrow federal student loans to assist with paying your education for the 2026-2027 academic year or later, we encourage you to review these updates.
The bill establishes a total lifetime limit of $257,500 for all combined federal student loans. This cap applies to the total outstanding principal balance of a student’s federal loans, which includes Subsidized, Unsubsidized and Grad PLUS loans. New lifetime loan limit of $257,500 includes student borrowing for undergraduate, graduate and professional study.
As of July 1, 2026, the bill eliminates Grad Plus borrowing – which currently allows graduate students to borrow up to the full cost of attendance for their program of study. Grad students who received Grad PLUS funding prior to July 1, 2026, will be grandfathered into the program and can receive funds up to three years in the SAME program in which they began borrowing Grad PLUS loans. If student change their major after July 1, 2026, they will no longer be eligible for a Grad Plus loan.
Borrowing Loan Limits:
Graduate
- Non-professional degrees
- $20,500 annually
$100,000 aggregate
- $20,500 annually
- Graduate professional degrees
- $50,000 annually
$200,000 aggregate
- $50,000 annually
Legacy Provision: Students who have borrowed a Federal Direct Loan before July 1, 2026, will benefit from a legacy provision that allows them to borrow based on previous loan limits for up to three academic years, or until the end of their academic program, whichever comes first. To qualify, students must remain enrolled in the same program of study at the same institution. Students may continue to borrow under existing regulations, including Grad PLUS Loans, up to the Cost of Attendance for a maximum of three additional years, provided they meet both of the following conditions:
- The student is enrolled in the same credentialed program during the 2026–27 academic year as they were before July 1, 2026.
- The student obtained a federal student loan (Subsidized, Unsubsidized, or Graduate PLUS) for that specific program prior to July 1, 2026.
If a student changes their major after July 1, 2026, they will no longer be eligible for the Grad Plus loan.
As of July 1, 2026, parents can only borrow up to $20,000 per year per student and $65,000 lifetime per student. These limits apply to all parents of a student, so the maximum amount a student may receive in a year is $20,000, and the lifetime amount is $65,000, regardless of whether one or more parents are borrowing on the student’s behalf. This is a change from the current which allows parents to borrow up to the full cost of attendance per student.
Legacy Provision: Students or parents who have borrowed a Federal Direct loan before July 1, 2026, will be allowed to borrow based on previous loan limits, for up to three academic years or the end of the dependent student's academic program, whichever comes first. To qualify, students must remain enrolled in the same program of study at the same institution.
- Implemented new and simplified Repayment Assistance Plan (RAP) with rates 1% to 10% of discretionary income.
- Eliminated SAVE plan.
- Extended forgiveness periods to 30 years.
- Introduced minimum monthly payments.
- All loans must be repaid on the same plan, so if you borrow before and after July 1, 2026, you will be limited to the standard or RAP plans.
- If you do not borrow new loans after July 1, 2026, you will be eligible to enroll in the current Standard, Graduated, Extended, or current Income Based (IBR) repayment plan.
Parent PLUS Repayment Plans
- Applies to ALL continuing/legacy and new borrowers.
- Only repayment option will be the tiered standard repayment plan.
- No forgiveness/cancellation options.
*If the student or parent borrower has a Federal Direct Loan made before July 1, 2026, while the dependent student is enrolled in a program of study, the parent can continue to borrow under the old loan limits for 3 academic years or the remainder of their dependent student’s expected time to credential, whichever is less.
Pell Grant
Beginning in the 2026-2027 academic year, students will not be able to receive the Pell grant in the following situations:
- Students are not eligible for the Pell grant if a student receives scholarships that
meet or exceed a student’s full cost of attendance. This includes athletes on a full-ride
scholarship.
- Scenarios
- If a student has a cost of attendance of $12,000 and receives $6,000 in Pell and $6,000 in an institutional grant, would that violate the provision? No.
- If a student has a cost of attendance of $13,000 and receives $13,000 from an outside scholarship, would that violate the provision? Yes.
- If a student has a cost of attendance of $13,000 and receives $6,000 in Pell and $6,999 in a scholarship, would that violate the provision? No, because scholarships are lower than the student’s full cost of attendance.
- Scenarios
- If a student’s Student Aid Index (SAI) is at least two times the maximum Pell grant award of $7,395 (which will be $14,790 and above), the student is not eligible for the Pell grant. This does not apply to students who qualify for a Pell grant under the Special Rule (dependent of certain deceased service members and Public Safety Officers).
Student & Parent Resources
- What Graduate Students Need to Know (Updated March 2026)
- What Professional Students Need to Know
- What New Parent Borrowers Need to Know
- What Current Parent Borrowers Need to Know
- Federal Student Aid Announcements
- Federal Student Aid Changes
- Loan Changes: A Brief Overview
- Loan Simulator
- Repayment Plan Options Chart
Loan Repayment Changes
Two new repayment plans will be available for new loans being disbursed as of July 1, 2026:
- New Standard Repayment Plan – Fixed monthly payments over 10,15, 20 or 25 years based on the borrowed loan amount
- Repayment Assistance Plan (RAP) – An income-based plan capping payment at 1% - 10% of your adjusted gross income (AGI) with forgiveness after 30 years. Please note, unlike older repayment plans, you cannot switch back to the standard plan once you have entered RAP.
Yes. Current borrowers (with no new loans after July 1, 2026) can temporarily remain on older income-driven repayment plans, such as IBR, PAYE or SAVE; however, they must transition to a new repayment plan by July 1, 2028. If they do not select a plan by that date, their servicer will automatically move into RAP.
Consolidation loans are only eligible for the Repayment Assistance Plan (RAP) or standard repayment plans.
Borrowers currently in an IDR plan have until July 1, 2028, to select a standard repayment plan, income-based repayment plan (or the Repayment Assistance Plan (RAP).
No, all new Parent PLUS loans must be repaid under the standard repayment plan and are NOT eligible for RAP.
The borrower must repay the ineligible loans separately under the standard repayment plan.
All loans must be repaid under the same repayment plan, and for Parent Plus loan borrowers, the only eligible plan is the standard repayment plan.
Yes. Economic Hardship and Unemployment deferments will be eliminated for loans first disbursed as of July 1, 2027. However, there is still an option for forbearance for up to nine months in any two-year period.
FAQ
The One Big Beautiful Bill Act (OB3) was signed on July 4, 2025, and includes significant reform to federal student aid programs. OB3 changes the eligibility and amounts for Pell Grants, sets new limits for federal student loans, requires loan adjustments for less than full-time enrollment, and introduces a new income-driven repayment option.
Most changes take effect starting with the 2026-2027 academic year.
No. If you are currently receiving aid or are in repayment, your grants and loans remain under their present terms for now. Most changes – including new loan limits and repayment options will apply starting in the 2026-2027 academic year.
OB3 requires annual loan amounts to be prorated in direct proportion to your enrollment status. Therefore, if you are not enrolled in a full-time status, your loan amounts will be adjusted based upon the number of credit hours enrolled per semester. You must still be enrolled in at least half-time status to receive loans. This has not changed.
Every student, athlete or not, who receives a full-ride scholarship that meets or exceeds their Cost of Attendance will not receive Pell Grants for the terms they receive the scholarship.
The term “professional degree” is defined as a degree that signifies
- 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.
A professional degree is generally at the doctoral level and requires at least six academic years of postsecondary education to complete, including at least two years of post-baccalaureate coursework, as well as generally requiring professional licensure to begin practice in the intended field.
The degree must be in the same group as one of the following professional degrees:
- Pharmacy (Pharm.D.)
- Dentistry (D.D.S. or D.M.D.)
- Veterinary Medicine (D.V.M.)
- Chiropractic (DC or DCM)
- 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.)
- Clinical Psychology (Psy.D. or Ph.D.)
On June 24, 2026, the U.S. District Court for the District of Columbia preliminarily stayed part of the U.S. Department of Education’s professional degree definition. This means that some of the programs that were identified as a professional degree program won't be considered a professional degree program, while other programs that previously weren't identified as a professional degree program will be considered a professional degree program for the duration of the stay.
Grad PLUS loans are being phased out under OB3. New graduate and professional students will no longer be eligible to borrow Grad PLUS beginning July 1, 2026. If you are already borrowing Direct Loans prior to July 1, 2026, you can still borrow a Grad PLUS if you remain enrolled in your current program of study for up to three consecutive academic years.
We will post updates on this website as new details become available.
You can also: Monitor announcements from the U.S. Department of Education.
- Institutional scholarships
- Alternative or Private Educational Lenders
- Monthly Payment Plan
- External Scholarships
Graduate/Professional Students Updates
Are You Receiving Federal Loans?
Starting July 1, 2026, Annual Federal loan limits must be reduced for students enrolled less than full-time. Graduate/Professional borrowers enrolled in less than 9.0 hours (9.0 hours is defined as full-time by the university regardless of a program’s definition of full-time enrollment) will only be able to borrow a prorated maximum loan offer based on enrolled hours. This is called a Schedule of Reduction change. You must be enrolled in 4.5 hours per semester to be eligible for Federal Student Loans.
Graduate Students
| Loan Offered | Fall Enrollment | Spring Enrollment | Total Academic Year Enrollment | Total Loan Eligibility |
|---|---|---|---|---|
|
$20,500 for Fall / Spring |
9.0 credit hours |
9.0 credit hours |
18.0 credit hours |
No Change Fully Enrolled; stays $20,500 |
|
$20,500 for Fall / Spring |
9.0 credit hours |
4.5 credit hours |
13.5 credit hours |
Can only receive 75% of the loan (13.5/18); fall amount: |
|
$10,250 fall only |
4.5 credit hours |
0 credit hours |
4.5 credit hours |
Can only receive 50% of the original single semester loan offer |
Professional Students
| Loan Offered | Fall Enrollment | Spring Enrollment | Total Academic Year Enrollment | Total Loan Eligibility |
|---|---|---|---|---|
|
$50,00 for Fall / Spring |
12.0 credit hours |
12.0 credit hours |
24.0 credit hours |
No Change Fully Enrolled; stays $50,000 |
|
$50,000 for Fall / Spring |
12.0 credit hours |
6 credit hours |
18.0 credit hours |
Can only receive 75% of the loan (18/24); fall amount: |
|
$25,000 fall only |
6 credit hours |
0 credit hours |
6 credit hours |
Can only receive 50% of the original single semester loan offer |
Contact Us
Campus Address
Zimbar-Liljenstein Hall
(570) 422-2800
Office of Financial Aid
fa@esu.edu
(570) 422-2800
