What you Need to Know: What Changed and When
A new federal law, called the One Big Beautiful Bill Act or Working Families Tax Cuts Act (also called OBBBA, OB3, or WFTCA), will impact some Federal Financial Aid programs beginning July 1, 2026, and/or with the 2026-27 federal award year. These changes may affect future financial aid eligibility, such as how much you can borrow and which federal programs are available to you.
What We Know
Loan Limits
The new lifetime federal loan limit is $257,500 for all Federal Direct student loans. This total includes loans for undergraduate, graduate and professional degree levels. Parent PLUS Loans are not included.
Loan borrowing is limited to the amount needed to cover Cost of Attendance (remaining educational costs) after all other estimated financial aid.
Undergraduate Students
- Federal Direct Subsidized and Unsubsidized Loans still exist.
- Federal Direct Loan Limits for undergraduates remain the same.
- Pell Grants are still available for eligible students.
Graduate Students
- New Federal Direct Unsubsidized loan limits apply:
- Annual limit: Up to $20,500 per year for most graduate programs
- Aggregate limit: Up to $100,000 total for most graduate programs
- Graduate PLUS loans will not be available for new borrowers on July 1, 2026.
Professional Students
Beginning July 1, 2026, students* meeting the U.S. Department of Education’s definition of “professional student” can borrow up to $50,000 per year, and up to $200,000 in total (“aggregate limit”), from the Federal Direct Unsubsidized loan program. The programs considered to be professional degree programs were initially limited by the Department of Education to 11 fields of study. On June 24, 2026, a court granted a temporary pause in response to a lawsuit challenging some provisions of the Department of Education’s professional degree definition, temporarily expanding the number of programs that qualify for the higher Direct Unsubsidized loan amounts. A final decision on which programs will remain eligible for professional student loan limits is expected in December 2026. Herzing University Financial Aid Staff will notify students enrolled in programs that are determined to be temporarily eligible for the professional student loan limits.
*This information does not apply to students who have already borrowed a Direct Loan for their current program of study prior to July 1, 2026. Current student loan borrowers who are continuing in the same program of study remain subject to pre-July 1, 2026 limits and retain access to borrow up to their full cost of attendance under the Federal Direct Graduate PLUS program.
Disclaimer: The information provided reflects our understanding of this issue as of the date it was last updated. Considerable uncertainty remains around how this temporary ruling impacts students, and guidance from the Department of Education is still evolving.
Graduate Plus (“Legacy”) Students
Some students may qualify for a legacy provision that allows continued borrowing through the Graduate PLUS loan program:
- If you borrowed a federal student loan before July 1, 2026, and
- If you stay in the same program at the same institution
Eligible students may borrow a Graduate Plus Loan for up to three additional academic years or for the remainder of their program. Changing programs, schools, or pausing enrollment will end the legacy provision.
For federal financial aid purposes, an Approved Break is reported as a withdrawal and is considered a break in continuous enrollment. Students who return after an Approved Break are not considered continuously enrolled and do not qualify for the federal interim exception (legacy provisions)
Less Than Full-Time Loan Reductions
New Less Than Full-Time (LTFT) enrollment loan limit requires the amount of any Direct Loan a student may borrow to be reduced based on enrollment intensity (the number of credits in the semester and/or academic year).
Parent Loans (Parent PLUS)
- Parent PLUS loans have new annual and lifetime borrowing limits for new loans after July 1, 2026:
- Annual limit: $20,000 per dependent student
- Aggregate limit: $65,000 per dependent student
- New Parent PLUS loans after that date cannot enter income-driven repayment plans. They will be eligible for the standard repayment plan only.
- Parents who have already borrowed loans should review loan and repayment options before July 1, 2026.
Student Loan Repayment
Repayment plan options will change beginning July 1, 2026:
New and Current Borrowers with new loans after July 1, 2026
Students who have borrowed before July 1, 2026, and will borrow a new loan after July 1, 2026, will have two repayment options:
Standard Repayment
- Fixed monthly payments
- Repayment terms vary between 10 to 25 years, depending on the loan amount
Repayment Assistance Plan (RAP)
- Monthly payment based on income
- Terms can last up to 30 years
- Any remaining balance may be forgiven at the end of the repayment terms
Current Borrowers with no new loans after July 1, 2026
- Borrowers will be eligible to enroll in the current Standard, Graduated, Extended, or Income-Based repayment plans, or may opt into RAP.
- Several income-driven plans (SAVE, PAYE, ICR) will close over time. Borrowers in those plans must choose a new plan by July 1, 2028.
What Students and Parent Borrowers Can Do Now
- Review the Federal Student Aid Website for updates about OBBBA
- Check your federal loan history at StudentAid.gov
- Pay attention to start dates and whether you borrowed any federal loans before July 1, 2026.
- Learn more about loan and repayment options and more here:
- Plan ahead. If unsure of how these changes will apply to you, contact your Financial Aid Advisor.