One Big Beautiful Bill Act
Federal Aid Changes: What the "One Big Beautiful Bill Act" Means for You
Signed into law on July 4, 2025, the “One Big Beautiful Bill Act” makes major updates to federal student aid. Many changes begin July 1, 2026. The Office of Scholarships and Financial Aid will continue updating this page as new details are released.
Key Updates
- New federal loan limits and repayment options go into effect July 1, 2026
- Legacy provisions will protect many currently enrolled borrowers from changes
- Minor changes to Federal Pell Grant eligibility and data reviews may impact certain students
- Standard Repayment Plan remains in place
- Repayment Assistance Plan (RAP), replacing all current income-driven repayment (IDR) plans
For Current Borrowers
- You began enrollment in a degree-seeking program prior to June 30, 2026 and
- You have borrowed federal loans under your current degree-seeking program
You’ll retain access to pre-reconciliation loan limits and borrowing programs for the expected time to degree completion or three academic years—whichever is shorter.
Legacy Provisions
- Annual Federal Direct Subsidized and Unsubsidized Loan limits remain unchanged.
- Federal Parent PLUS borrowers remain eligible to borrow through their student’s current program of study until degree completion.
- Current Federal Parent PLUS borrowers are not subject to the new annual or lifetime borrowing limits.
- Current graduate borrowers are eligible to still utilize the Federal Grad PLUS Loan (must have borrowed prior to the start of the 2026-27 academic year - see below for terms)
New Federal Loan Limits (Effective July 1, 2026)
- Eligible graduate students can borrow up to $20,500 annually. Medical students can borrow up to $50,000 annually. For financial aid purposes, advanced degrees in Nursing and Physician's Assistant are considered graduate level programs, not professional per the U.S. Department of Education's official designations.
- Eligible graduate students have a lifetime aggregate limit of $100,000. Eligible medical students have a lifetime aggregate limit of $200,000. These lifetime amounts do not include any subsidized and unsubsidized loans borrowed at the undergraduate level.
- All new federal student loan borrowers will have a lifetime borrowing maximum on all federal student loans of $257,500 (this includes undergraduate loans as well as graduate loans).
- Loan proration: Annual limits will be prorated for students enrolled less than full-time.
FAQ's
Graduate and Professional Students:
Do these changes affect my 2025-26 financial aid package?
No. Your current 2025-26 fall/spring/summer financial aid package will not be impacted by this new law.
How much can I borrow annually under the new Federal Direct Unsubsidized Loan Program?
Prior to July 1, 2026: Eligible graduate students can borrow up to $20,500 annually. Medical students can borrow up to $40,500 for fall/spring (with additional funds for those in year 3).
July 1, 2026 and Beyond: Eligible graduate students can borrow up to $20,500 annually. Medical students that are not grandfathered into the prior limits, can borrow up to $50,000 annually. For financial aid purposes, advanced degrees in Nursing and Physician's Assistant are considered graduate level programs, not professional per the U.S. Department of Education's official designations.
Loans for students that not full time will have their loans prorated based on enrollment for the term/year.
What are the lifetime borrowing limits for the Federal Direct Unsubsidized Loan program?
Prior to July 1, 2026: Eligible graduate students have a lifetime aggregate limit of $138,500. Eligible medical students can borrow up to $224,000. These lifetime amounts include any subsidized and unsubsidized loans borrowed at the undergraduate level.
July 1, 2026 and Beyond: Eligible graduate students have a lifetime aggregate limit of $100,000. Eligible medical students (not those grandfathered) have a lifetime aggregate limit of $200,000. These lifetime amounts do not include any subsidized and unsubsidized loans borrowed at the undergraduate level.
Is there a legacy provision for graduate and professional students who are currently enrolled?
Yes. If a borrower has a federal student loan (Direct Unsubsidized or Grad PLUS) disbursed in their current academic program before July 1, 2026, the student will borrow under current annual and lifetime loan limits for three academic years or the remainder of their expected time to graduation, whichever is less.
What is a professional student?
For financial aid purposes, a “professional” student at CMU is defined as a student within the medical school working on their M.D. degree.
If I take a break from pursuing my program or withdraw from the University, will my three years of eligibility be extended?
What happens if my program is expected to take longer than the three additional years?
There are no extensions to the three-year grandfathering provisions so at the end of that period you will be subject to the new annual and aggregate loan limits.
How will the Graduate PLUS program change under this new law?
Prior to July 1, 2026: If a borrower has a federal loan (Federal Unsubsidized or Grad PLUS) disbursed for their current academic program before July 1, 2026, the student can continue to borrow for three academic years or the remainder of their expected time to graduation, whichever is less.
July 1, 2026 and Beyond: New graduate and professional student borrowers are not eligible for the Graduate PLUS Loan program.
Is my loan eligibility reduced if I drop below full time?
Yes. Federal loans may be prorated based on enrollment below full time for the term and/or year.
What additional options are available to me to help fund my education?
Graduate and professional students continue to have access to private student loans from a variety of lenders.
Undergraduate Students:
Do these changes affect my 2025-26 financial aid package?
No. Your current 2025-26 fall/spring/summer financial aid package will not be impacted by this new law.
How does this law affect my 2025-26 Pell Grant?
Your 2025-26 Pell Grant award will not change based on this new law.
Am I still eligible for an undergraduate Federal Direct Subsidized Loan?
Yes. Under current federal rules and regulations, eligible undergraduate students with demonstrated financial need can still qualify for a subsidized loan for the current aid year and beyond.
Am I still eligible for an undergraduate Federal Direct Unsubsidized Loan?
Yes. Under current federal rules and regulations, undergraduate students can still qualify for an unsubsidized loan for the current aid year and beyond.
Will I still qualify for federal student loans if I am enrolled less than full time?
Beginning with the 2026-2027 school year, students enrolled less than full-time may have their loans adjusted accordingly. Students enrolled less than half time are not eligible for federal student loan disbursement.
Parents:
How much can a parent of a dependent undergraduate student borrow annually under the Federal Parent PLUS program?
Prior to July 1, 2026: Eligible parents of dependent undergraduate students can borrow Parent PLUS Loan funds up to the full Cost of Attendance, minus any other financial aid, to help finance their student's education.
July 1, 2026 and Beyond: Eligible parents of dependent undergraduate students can borrow up to $20,000 annually in Parent PLUS Loan to help finance their student's education.
What is the lifetime borrowing limit under the Federal Parent PLUS program?
Prior to July 1, 2026: There is no lifetime borrowing limit for parents of students with Parent PLUS Loans who have borrowed under the Parent PLUS Loan program prior to July 1, 2026.
July 1, 2026 and Beyond: New parent borrowers have a $65,000 lifetime aggregate limit per dependent student.
Under the post-July 1, 2026 borrowing limits for Parent PLUS, what if my parent needs more than $20,000 in a year, or they are at the $65,000 lifetime limit?
Parents and their students may research and apply for private student loans if they require additional funding.Your financial aid package may contain both a Parent PLUS loan and a private loan. Total financial aid can never exceed the overall Cost of Attendance
Is there a legacy provision for parents who have students currently enrolled?
Yes. If a student or parent borrower has any federal loans disbursed before July 1, 2026, the parent can continue to borrow under pre-July 1, 2026 annual and lifetime Parent PLUS loan limits for three academic years or the student's completion of their degree, whichever is less.
If my dependent child takes a break from pursuing their program or withdraw from the university, will my three years of eligibility be extended?
No. Current guidance says that students who withdraw or take a leave from their program will lose access to the legacy provisions immediately.
What happens if my dependent child's program is expected to take longer than the three additional years?
There are no extensions to the three-year grandfathering provisions so at the end of that period you will be subject to the new annual and aggregate loan limits.
Who should I contact if I have additional questions about upcoming federal loan changes?
Please contact us at financialaid@cmich.edu or 989-774-3674.
Please Note:
- CMU does not have the ability to grant exceptions to federal regulations, including those concerning enrollment, legacy provisions or federal loan eligibility.
- This information is based on the current understanding of new rules and regulations as they relate to federal student financial aid, and could change with little notice. We will update and add to this page as additional guidance is received from the U.S. Department of Education.