Last Updated: January 28, 2026

The One Big Beautiful Bill Act (OBBBA) includes changes to federal financial aid that may affect your current or future funding. While loan limits for undergraduate students will stay the same, the bill introduces new caps on Parent PLUS loans and makes significant changes to how graduate students can borrow.

These updates will go into effect July 1, 2026. Understanding them now can help you plan ahead for both your education and your finances. We will continue to update this page as we receive additional guidance from the U.S. Department of Education.

Current LMU Students:

Current LMU students who have a disbursed loan prior to July 1, 2026 can continue to borrow under legacy provisions, so long as the student does not withdraw, take a leave of absence, or change their degree program.

A current LMU student who has not previously borrowed federal loans prior to July 1, 2026 will be subject to new loan provisions as detailed below.

Prospective LMU Students:

Prospective students enrolling in a new program at LMU after June 30, 2026 will be considered a new borrower and will be subject to new loan borrowing provisions detailed below.

The information on this page is provided by LMU Financial Aid staff to help students navigate changes in federal student aid and federal student loans. This page will be updated as new information becomes available from the Department of Education. Students are also encouraged to consult official federal sources for the most current and comprehensive information. For additional details, please visit studentaid.gov.

Our office is committed to helping students and their families understand their options and plan accordingly. If you have any questions, please contact our office.

Please use the navigation buttons below to skip to questions specific to Undergraduate Students or Graduate and Law Students. 

Undergraduate Students

New Loan borrowers as of July 1, 2026:

New borrower definition: A new borrower is anyone who takes out a federal student or Parent PLUS loan for the first time on or after July 1, 2026.

New Parent PLUS Loan borrowing limits:

• Annual limit (combined parents): $20,000 per academic year per student
• Lifetime maximum: $65,000 per student
• These annual and lifetime limits apply per dependent student, not per parent.

For additional resources due to the new borrowing limits, check out our Undergraduate Private/Alternative Loan page.

“Legacy borrowers” Current students who borrowed a loan before July 1, 2026:

Legacy borrower definition: A legacy borrower is anyone who is enrolled in a current undergraduate program and has a disbursed federal student or Parent PLUS loan before July 1, 2026.

Impact on legacy Parent PLUS borrowers: Legacy Parent PLUS borrowers are not subject to the new borrowing limits and may continue to borrow through their student’s current program of study until program completion or for up to three academic years, whichever occurs first.

Impact of Withdrawals and Leave of Absence on Legacy borrowers: Students must remain continuously enrolled to maintain eligibility under the legacy clause. Withdrawals or leaves of absence for any reason will result in forfeiture of legacy status.

Change in Major: Students may change their major of study, within the same degree program, and still maintain eligibility under the legacy clause.

Loan Proration for All Part-time Students Regardless of New or Legacy Status:

• Part-time students (those enrolled less than full-time) will only be eligible for a portion of their annual student loan limit.
• Institutions will be required to prorate annual student loan amounts in direct proportion to the percentage of full-time status the student is enrolled.

Federal Need Analysis Calculation Changes:

• Requires that foreign income be included in the adjusted gross income used to calculate Pell grant eligibility.
• Students with a calculated Student Aid Index (SAI) that exceeds twice the maximum Pell Grant award will be ineligible for Pell.

Graduate and Law Students

New Loan borrowers as of July 1, 2026:

New borrower definition: A new borrower is anyone who takes out a federal student loan for the first time on or after July 1, 2026.

Graduate PLUS Loan availability: The Graduate PLUS Loan program will be discontinued for new borrowers as of July 1, 2026.

Federal Direct Unsubsidized Loan changes for graduate students:

• Lifetime borrowing maximum of $100,000 (excluding loans borrowed as an undergraduate)
• Annual borrowing limit remains $20,500 per academic year

Federal Direct Unsubsidized Loan borrowing limits for new JD students:

• Up to $50,000 per academic year
• Lifetime borrowing maximum of $200,000 (excluding loans borrowed as an undergraduate)

Overall federal student loan lifetime limit:

• New lifetime borrowing maximum of $257,500 (excluding Parent PLUS Loan amounts)

For additional resources due to the new borrowing limits, check out our Graduate or Law student Private/Alternative loan page (listed under "Types of Available Aid").

“Legacy borrowers” Current students who borrowed a loan before July 1, 2026:

Legacy borrower definition: A legacy borrower is anyone who is enrolled in a current graduate program and has a disbursed federal student or Graduate PLUS loan before July 1, 2026.

Graduate PLUS Loan eligibility for legacy borrowers: Current Graduate PLUS borrowers may continue to apply for Grad PLUS loans through their current program of study until degree completion or for up to three academic years, whichever occurs first.

Graduate Unsubsidized Loan limits for legacy borrowers:

• Annual limit: $20,500 annual limit remains the same
• Lifetime limit: $138,500 (includes both undergraduate and graduate student borrowing)

Impact of Withdrawals and Leave of Absence on Legacy borrowers: Students must remain continuously enrolled to maintain eligibility under the legacy clause. Withdrawals or leaves of absence for any reason will result in forfeiture of legacy status.

Loan Proration for All Part-time Students Regardless of New or Legacy Status:

• Part-time students (those enrolled less than full-time) will only be eligible for a portion of their annual student loan limit.
• Institutions will be required to prorate annual student loan amounts in direct proportion to the percentage of full-time status the student is enrolled.

Loan Repayment Updates

Public Service Loan Forgiveness (PSLF)

There are no changes to PSLF provisions.

New repayment plans starting July 1, 2026 (for new loans):

• New Standard Repayment Plan: Fixed monthly payments over 10, 15, 20, or 25 years, based on loan amount.
• Repayment Assistance Plan (RAP): Replaces the new Income-Based Repayment plan.

Changes to deferment options:

• Economic Hardship and Unemployment Deferments will be eliminated for loans first disbursed on or after July 1, 2027.
• Borrowers can still use forbearance for up to nine months within any two-year period.

For more detailed information about changes to loan repayment, please visit the "Loan Repayment changes due to the One Big Beautiful Bill Act" section of our Financial Literacy page.