The One Big Beautiful Bill Act

One Big Beautiful Bill Act

The One Big Beautiful Bill Act, also referred to as the Working Families Tax Cuts Act (WFTCA), has been signed into law and introduces upcoming changes to federal student aid programs. , and will be implemented based on guidance from the Department of Education. These changes are expected to affect both current and prospective undergraduate and graduate students, including updates to federal loan limits, repayment options, and eligibility requirements for financial aid programs.

There are no changes to federal student aid for the Fall 2025 and Spring 2026 terms.

Please note: The information shared on this page is currently evolving. Information on this page reflects the current guidance available.

Information may change as federal rules and guidelines are established and we will update this page as new information is received. Students are encouraged to monitor studentaid.gov for more information.

Last Updated: June 1st, 2026

Major Changes to Federal Student Loans

Starting July 1, 2026, federal student loan borrowing will look significantly different for many students and families. New annual and lifetime caps are being introduced, Graduate PLUS Loans are being eliminated for new borrowers, and loan amounts will be adjusted based on how many credits you take per semester.

Graduate Student Loans

Beginning July 1, 2026, Graduate PLUS Loans will be eliminated for new borrowers. If you are starting a new graduate or professional program in Summer 2026 or later, the graduate plus loan will no longer be available to you.

Borrowing annual unsubsidized loans will be capped, based on your program type:

  • Graduate programs: up to $20,500 per year 
  • Professional programs: up to $50,000 per year

Lifetime limits will also apply to graduate unsubsidized loans, separate from any debt you carried as an undergraduate:

  • Graduate programs: $100,000 lifetime cap
  • Professional programs: $200,000 lifetime cap
  • No borrower may exceed $257,500 in total federal loans across all levels of study combined (undergraduate, graduate, and professional). 

Please note: if you are currently enrolled and received a federal loan disbursement before July 1, 2026, you may qualify for legacy provisions that allow you to continue borrowing under current rules for a limited time. See the Legacy Provisions section below for details.

Parent PLUS Loans

Starting July 1, 2026, Parent PLUS Loans will have new annual and lifetime caps for new borrowers, which allow parents (combined) to borrow up to the full cost of attendance with no lifetime cap:

  • Annual limit: $20,000 per year per dependent student
  • Lifetime limit: $65,000 per dependent student (without regard to amounts forgiven, repaid, or discharged)
  • No borrower may exceed $257,500 in total federal loans across all levels of study combined ( undergraduate, graduate, and professional). 

These limits apply per dependent student. If a family has multiple dependent students enrolled in college, each student is subject to their own separate $65,000 borrowing cap. The limit applies collectively to all parent borrowers for that student and is not a separate limit for each parent.

A few other things to know:

  • Interest accrues on Parent PLUS Loans even while the student is in school
  • Parents must pass a credit check to borrow. If denied, the dependent student may be eligible for additional Unsubsidized Loan funds
  • Repayment is the parent’s responsibility and cannot be transferred to the student
  • Parents borrowing on or after July 1, 2026 will be subject to the new repayment plan options only (Tiered Standard Repayment or the Repayment Assistance Plan (RAP))

Please note: If your parent received at least one Parent PLUS disbursement before July 1, 2026 while you were enrolled in your current program, they may qualify for legacy provisions. See the Legacy Provisions section below for details.

Loan Proration BASED ON ENROLLMENT

Beginning in the 2026–2027 academic year, federal student loan eligibility will be prorated based on a student’s enrollment status each semester. This means the amount of federal student loans a student may receive can vary depending on the number of credits they are enrolled in at the time of disbursement.

Loan proration affects students who are enrolled less than full-time. Beginning in the 2026–2027 academic year, part-time students will receive reduced federal student loan amounts based on their enrollment level.

For federal aid purposes, enrollment status is defined as follows:

  • Full-Time: 12+ credits per semester 
  • Half-Time: 6–11 credits per semester (subject to loan proration) 
  • Less than Half-Time: 1–5 credits per semester (not eligible for direct loan)

Please note: changes in enrollment after a loan has been disbursed, such as dropping below full-time status, may result in an adjustment to your loan eligibility for the affected semester and any remaining semesters within the academic year.

As these are significant changes and may be confusing, we encourage students to contact our Direct Loans Team at directloans@qc.cuny.edu for assistance in understanding how their enrollment may affect their federal loan eligibility.

Changes to Loan Repayment Plans

For students who take out new loans on or after July 1, 2026, only two repayment options will be available:

  1. Tiered Standard Repayment: Fixed monthly payments with terms ranging from 10 to 25 years, depending on the total amount borrowed.
  2. Repayment Assistance Plan (RAP): There will be monthly payments based on 1-10% of your income. Loan forgiveness is available after 30 years (360 payments) or through the Public Service Loan Forgiveness (PSLF) program. 

Students with loans borrowed before July 1, 2026 should contact studentaid.gov or your loan servicer for guidance on how existing repayment plans are affected.

Federal Student Loans: Before vs After 

Loan Feature Before After (OB3 rules – effective July 2026)

Graduate PLUS loans

 Available; could borrow up to full cost of attendance Eliminated starting July 1, 2026, with limited exception
Graduate student annual limit $20,500 (Direct Unsubsidized) + Grad PLUS loans $20,500 max per year, no PLUS loans
Graduate lifetime limit $138,500 (including undergrad loans) $100,000 lifetime cap (only loans taken for graduate or professional degree)
Parent PLUS loans Up to cost of attendance $20,000 per year, $65,000 lifetime per student
Overall federal lifetime limit None across all programs combined $257,500 total lifetime cap (undergrad + grad + professional)
Income‑driven repayment plans Multiple options (SAVE, PAYE, REPAYE, ICR, IBR) Only 1 option: Repayment Assistance Plan (RAP)
Repayment term
 20–25 years (most IDR plans).
10 years for Standard Repayment Plan.
Up to 30 years for Consolidated Loans.

Under Repayment Assistance Plan (RAP), there will be monthly payments based on 1-10% of your income. Repayment may extend up to 30 years. Under Tiered Standard Repayment, there will be fixed monthly payments over 10, 15, 20, or 25 years.

What these loan changes mean for students

If you are an undergraduate student: The core federal loan limits for undergraduates (up to $5,500–$7,500 per year for dependent students) are not being eliminated, but your semester loan amounts will be reduced if you are enrolled part-time. Planning your courses to maintain full-time enrollment can protect your full aid eligibility.

If you are or plan to be a graduate student: This is one of the most significant areas of change under the One Big Beautiful Bill Act. With the elimination of Graduate PLUS Loans for new borrowers beginning July 1, 2026, graduate students will have updated federal borrowing limits and should review their overall funding plan for their program.

You should consider:

  • Reviewing your total cost of attendance for your program
  • Understanding your annual and lifetime federal loan limits
  • Exploring additional funding options early, such as scholarships, assistantships, or payment plans
  • Planning ahead to ensure all educational costs are covered over the duration of your program

As these are significant changes and may be confusing, we encourage students to contact our Direct Loans Team at directloans@qc.cuny.edu for assistance in understanding how their enrollment may affect their federal loan eligibility.

Important Notes for Current Students:

Legacy pROVISIONS

If you received at least one disbursement of a Federal Loan before July 1, 2026, while enrolled in your current program, you may qualify for legacy borrower status.

This means:

  • You may continue borrowing under current loan limits (including Graduate PLUS Loans, if applicable) for up to three additional academic years or until you complete your current program, whichever comes first.
  • These protections apply to your current program only. If you change into a new program, you will be considered a new borrower under the new rules.
  • If you take a leave of absence and return, you will be subject to the new guidelines upon re-enrollment.
  • Federal Work-Study programs and TAP eligibility are not impacted by these changes.

fafsa application changes

Beginning with the 2026–2027 FAFSA, the following assets will no longer be counted when calculating your Student Aid Index (SAI):

  • The net worth of a family-owned business with fewer than 100 full-time employees
  • The net worth of a farm on which the family lives
  • The net worth of a family-owned commercial fishing business

federal pell grant changes