The One Big Beautiful Bill Act was signed into law on July 4, 2025 and includes changes to federal student loan programs that will take effect beginning July 1, 2026. There are no changes to federal student aid for the 2025 to 2026 academic year as a result of this legislation.
MUSC is actively monitoring guidance from the U.S. Department of Education and other federal agencies. This page will be updated as additional details are released.
Summary
- No changes to federal student aid for the 2025 to 2026 academic year
- Changes to graduate and parent loan programs are scheduled to begin July 1, 2026
- Some aspects of the law require additional federal clarification
Students should continue to rely on official federal sources for final determinations regarding eligibility and repayment options.
What We Know
Grad PLUS Loans
New Grad PLUS loans will not be available to borrowers who begin borrowing after July 1, 2026.
Students who borrowed any federal direct student loans prior to July 1, 2026 may be permitted to continue borrowing under current rules for a limited period while completing their program, subject to federal transition guidance.
Graduate & Professional Direct Loan Limits
Beginning July 1, 2026, new annual and lifetime borrowing limits will apply to graduate and professional students.
- Professional programs (e.g., dental medicine, medicine, pharmacy) may allow borrowing up to $50,000 per year with a lifetime limit of $200,000
- Other graduate programs may allow borrowing up to $20,500 per year with a lifetime limit of $100,000
Students who borrowed Direct Loans before July 1, 2026 may retain current borrowing limits while enrolled in the same program for up to three additional years or until program completion, whichever occurs first.
Undergraduate Limits and Parent PLUS Loans
Undergraduate Direct Loan annual limits will not change. However, undergraduate borrowing will count toward newly established lifetime loan limits.
Beginning July 1, 2026, Parent PLUS loans will be capped at:
- $20,000 per student per year
- $65,000 lifetime limit per dependent student
Parents who borrowed Parent PLUS loans prior to July 1, 2026 may continue borrowing under current limits for a limited transition period, subject to federal guidance.
Public Service Loan Forgiveness
The legislation does not make changes to the Public Service Loan Forgiveness program. Separate regulatory or policy actions may still affect PSLF in the future.
What Remains Unclear
- Definition of Professional Programs: Federal guidance has not yet clarified which programs will qualify as professional programs eligible for higher borrowing limits. This may affect students enrolled in health professions and dual degree programs.
- Grad PLUS Eligibility for Continuing Students: It remains unclear whether students who retain Grad PLUS eligibility after July 1, 2026 will be able to choose higher Direct Loan limits instead of Grad PLUS loans.
- Enrollment Level and Loan Proration: The law includes provisions related to enrollment status that may reduce loan eligibility for students enrolled less than full time. Additional guidance is expected.
- Repayment Plan Changes: For loans first disbursed after July 1, 2026, existing income driven repayment plans will be replaced by a new Repayment Assistance Program. Borrowers with loans issued both before and after July 1, 2026 may have different repayment options depending on loan type and disbursement date. Current borrowers in certain repayment plans may be required to transition by July 1, 2028.
Important Disclaimer
This information reflects MUSC’s current understanding of the One Big Beautiful Bill Act based on available federal guidance. It is not official federal guidance and may change as regulations and implementation details are finalized.
Additional Resources
For additional resources published by Federal Student Aid (FSA) and national associations, please visit:
