One Big Beautiful Bill Act (OBBB): Federal Student Loan Updates
Updated: April 15, 2026: • Key changes effective: July 1, 2026 (pending final federal guidance)
Enacted in July 2025, the One Big Beautiful Bill Act (OBBB) introduces major updates to federal student loan programs. Some provisions take effect July 1, 2026. We are awaiting final rules and written guidance from the U.S. Department of Education (ED) and will update this page as details are confirmed.
At a glance
- Grad PLUS: phased out for new borrowers starting July 1, 2026
- Parent PLUS: new annual and lifetime caps for new borrowers starting July 1, 2026
- New repayment plans: Standard and RAP beginning July 1, 2026
- Current borrowers: some grandfathering provisions may apply
- More details coming: ED regulations and implementation guidance are pending
Need help? This page is maintained by the WPI Office of Financial Aid to provide timely, student-friendly guidance. For official federal guidance, refer to studentaid.gov. Questions? Email finaid@wpi.edu.
Grad PLUS loans
- Phased out for new borrowers (effective July 1, 2026): New Grad PLUS loans will not be available for new borrowers after this date.
- Existing borrowers: If you have any Graduate Direct Loan or Grad PLUS Loan disbursed before July 1, 2026, you may remain eligible for Grad PLUS loans for up to three years or until your published program length, whichever comes sooner. No lapses in enrollment are permitted during this period.
Graduate Unsubsidized Direct Loans
| Borrower type | Annual limit (two-semester loan period) | Lifetime borrowing limit |
|---|---|---|
| New borrowers (as of July 1, 2026) | Up to $20,500 | $100,000 |
| Existing borrowers | Up to $20,500 | $138,500 |
Undergraduate Direct Loans and Parent PLUS Loans
- Undergraduate Direct Loans: No changes to annual limits are noted here, but borrowed amounts will now count toward new lifetime limits.
- Parent PLUS Loans (new borrowers starting July 1, 2026): Capped at $20,000 per student per year, with a $65,000 lifetime limit per dependent student.
- Parent PLUS Loans (existing borrowers): If a Direct Loan was disbursed to the student or a Parent PLUS Loan was disbursed for the student before July 1, 2026, the family may access Parent PLUS under current limits until completion of the current degree or for up to three additional years (whichever comes first). Current limits are up to the Cost of Attendance minus other financial aid.
Combined lifetime maximum: $257,500 for all federal student loans combined, excluding Parent PLUS Loans.
Public Service Loan Forgiveness (PSLF)
No changes to PSLF are included under OBBB. However, separate regulatory proposals may introduce new eligibility limitations.
Loan proration for students less than full time
The bill includes provisions to prorate loan amounts based on enrollment status. Students enrolled less than full time may receive only a prorated portion of the annual loan limit, which could also reduce eligibility in a later term. We are awaiting ED guidance on how proration will be implemented and will update this page when final rules are published.
New federal loan repayment plans (effective July 1, 2026)
Beginning July 1, 2026, there will be two repayment options available for applicable loans: Standard and RAP (Repayment Assistance Program).
Standard plan
For loans disbursed after July 1, 2026, the repayment term is determined by the original loan balance. Clarity is still needed on PSLF eligibility under updated Standard plan guidelines.
| Original loan balance | Repayment term | Number of payments |
|---|---|---|
| Up to $24,999 | 10 years | 120 |
| $25,000–$49,999 | 15 years | 180 |
| $50,000–$99,999 | 20 years | 240 |
| $100,000 or more | 25 years | 300 |
RAP (Repayment Assistance Program)
- Term: Up to 30 years to repay
- Payment amount: 1%–10% of income
- PSLF eligible: Yes
Updates and disclaimer
Updates: Please check back for updates as more official information becomes available from the Department of Education.
Disclaimer: This page is provided by the WPI Office of Financial Aid to help students understand potential changes related to OBBB. Students should refer to studentaid.gov for official guidance.