Key Changes to Federal Student Loans Made in the Recent One Big Beautiful Bill Act
Enacted in July 2025, the One Big Beautiful Bill Act (OBBB) made significant changes in federal student loan programs as part of shifts in fiscal policy. While there are no changes to federal student loans for the 2025–26 academic year, changes resulting from the legislation are slated for July 1, 2026.
Bay Path University is continuing to track all of these changes and plans to update this site as more clarification from ED is released. In the meantime, please note:
- There are no changes to financial aid for the 2025–26 academic year stemming from this legislation.
- Students starting graduate school before July 1, 2026, may still be eligible for Grad PLUS under current rules.
If you have questions, please contact Student Financial Services at sfs@cambridgecollege.edu.
Important disclaimer: The information on this page is provided by Cambridge College Student Financial Services staff to orient students. It is not official guidance. Students should refer to federal sources such as studentaid.gov.
What We Know As Of March 2026
Grad PLUS Loans
- Grad PLUS loans will be phased out beginning July 1, 2026.
- Some continued eligibility will exist for current borrowers completing their programs.
New Graduate Unsubsidized Direct Loan Limits (Effective July 1, 2026)
Professional programs:
Up to $50,000/year, $200,000 lifetime limit.
Other graduate programs:
Up to $20,500/year, $100,000 lifetime limit.
- Definitions of “professional” vs. “graduate” programs are still unclear.
- Existing borrowers may continue under current limits for up to 3 years or until program completion.
What Does This Mean?
It is more important than ever to understand how much you’ve already borrowed, as it impacts your future eligibility. You can view your borrowing history at studentaid.gov.
Many students may need to rely on private financing to cover remaining costs.
Undergraduate Limits and Parent PLUS Loans
- No changes to undergraduate loan limits.
- Beginning July 1, 2026, Parent PLUS loans will be capped at:
- $20,000/year
- $65,000 lifetime per student
- Existing borrowers can continue under current limits for up to 3 years.
Public Service Loan Forgiveness (PSLF)
No changes under this legislation, though separate regulatory changes have been proposed.
What Remains Unclear
Professional vs. Graduate Program Definitions
Definitions are still pending from the Department of Education, including how dual-degree programs will be treated.
Grad PLUS Loans for Existing Borrowers
It is unclear whether eligible students can decline Grad PLUS to access new unsubsidized loan limits. Additional guidance is expected.
Loan Proration for Part-Time Students
- Loan amounts may be prorated based on enrollment level.
- Less than full-time enrollment may reduce eligibility.
New Repayment Plans
- Income-driven plans (IBR, PAYE, SAVE) will be replaced with RAP for new loans after July 1, 2026.
- Borrowers may still switch to standard repayment plans (10–25 years).
- Existing borrowers can retain current plans but must transition by July 1, 2028.
Frequently Asked Questions
Will taking classes part-time reduce the amount I can borrow?
Yes. Loan eligibility will be adjusted based on enrollment level.
How do I know if I’m a new or current borrower?
If your loans for your current program were disbursed before July 1, 2026, you are likely a current borrower. Otherwise, you are considered a new borrower.
What happens if I change programs?
Changing programs may reset your borrower status and subject you to new limits.
What should students consider before starting another degree?
Students starting new programs after July 1, 2026, should expect to be classified as new borrowers and may need private financing.
What options replace Grad PLUS?
Students may need to explore scholarships, employer support, or private loans.
How do program classifications affect borrowing?
Students in programs not classified as “professional” may be subject to lower borrowing caps.
What if my program takes longer than expected?
You may lose eligibility for legacy borrowing limits after the allowed timeframe.
What should I do now?
Evaluate program costs, timelines, and financial resources early to prepare for the new limits.
What is private financing?
Private loans are offered by banks and lenders, require repayment with interest, and depend on creditworthiness. Many students use co-signers to qualify or secure better rates.