The One Big Beautiful Bill Act (OB3) that was signed into law in 2025 includes several important financial aid changes. Most updates begin July 1, 2026 and could affect how you pay for college.

What’s Changing:

  • Loan limits are stricter, especially for graduate students and parents
  • Loans will be prorated based on enrollment at every student level
  • Graduate PLUS loans are ending
  • Repayment plans are being simplified
  • New rules may affect who qualifies for Pell Grants

Student Loan Changes:

  • Graduate PLUS loans are ending
  • The Grad PLUS program (which let grad students borrow up to full cost) is eliminated. Graduate students will no longer be able to borrow unlimited federal loans.
  • Students who have taken out a Grad PLUS loan prior to July 1, 2026-who remain in their same program of study, will be grandfathered into the PLUS program-and can continue to borrow for the 26-27 year.

New Loan Limits

Undergraduate students

  • Loan limits stay the same, but:
    • Parent borrowing is now capped

Parent PLUS loan Limits

  • Parents can no longer borrow up to cost; there is now an annual cap.
    • $20,000 per year per student
    • $65,000 total lifetime limit per dependent student-so if you have two students in school, you can take out a Parent PLUS loan up to $20,000 per year up to $65,000 total.

Graduate students

  • $20,500 per year in federal Direct Loans remains the same
  • $100,000 is the new lifetime total loan limit. Students who are above that total now will be grandfathered into the previous limit of $138,500

Lifetime borrowing cap

  • $257,500 total in lifetime loan limit across all federal loans

Loan Proration

  • All students who attend part-time (under 12 credit hours for undergraduates and under 9 hours for graduates), will have their loan eligibility reduced proportionally to the number of credits they are taking. Students who plan to drop classes or do not enroll as a full-time student should discuss these changes with their advisor and the Student Service Center.
  • Enrollment will be based on the Enrollment Intensity- a percentage of the courses you are registered for. For example, 12 credits are full-time enrollment for undergraduate students, and 9 credit hours are full-time enrollment for graduate students
  • Loans reduced in one term cannot be added back in a future term.
  • These changes are going into effect in mid-2026, because of a delay in regulations. Some students may already be awarded federal financial aid and will have their loans reduced based on this change. If this happens, it will be communicated to you by email, and you will have an active message on your account in the Cav Center.

Loan Proration Examples

$1000 is the full loan amount for the fall term as an undergraduate student. The student enrolls part time in 6 credit hours for the term.

Enrollment intensity = 6 enrolled / 12 full-time = 50%
50% x $1000 = $500 in loan eligibility for the term

*Things to consider-the additional $500 not used in the fall term cannot be applied to the future term if the student is enrolled full-time.

$10,000 is the full loan amount for the spring term as a graduate student. The student enrolls part-time in 7 credit hours for the term.

Enrollment intensity = 7 enrolled / 9 full-time = 77.78%
77.78% x $10,000 = $7,778 in loan eligibility for the term

 

Changes to Loan Repayment

  • There will be fewer repayment plans
    • Current income-driven plans are being replaced with just two options.
    • A new Repayment Assistance Plan (RAP) will base payments on income.

Changes to Pell Grants

  • Pell Grant funding is not increasing.
  • If your total costs are already covered by scholarships, you may no longer receive Pell.
  • Some FAFSA formula updates may change who qualifies (like income calculations and eligibility thresholds) What this means: Pell is still available, but eligibility and amounts.

What You Should Do Now

  • Plan for possible gaps in funding-you can discuss private loan options with our office
  • Apply early for scholarships and institutional aid
  • Be mindful of borrowing limits, especially for grad school
  • Stay in touch with the Student Service Center call us at 330-490-7367 or email us at studentservicecenter@walsh.edu.