Important Changes to Federal Student Loans from the One Big Beautiful Bill Act

Enacted in July 2025, the One Big Beautiful Bill Act (OBBB) made significant changes to federal student loan programs which will go into effect on July 1, 2026, for the 2026–⁠27 academic year and beyond. 

Please note: The information contained on this page is provided by Berklee’s Office of Student Financial Services to inform students and parents about the changes to the federal student loan programs. While it is based on our good faith understanding of the changes coming, it is not official guidance. Students and parents should refer to federal governmental sources for official guidance. See studentaid.gov for more information.

Grad PLUS Loans

  • Grad PLUS loans will be phased out on July 1, 2026; beginning on that date, Grad PLUS loans will not be available for new borrowers.
  • Current Grad PLUS loan borrowers are eligible to borrow to complete their current degree.

Graduate Unsubsidized Direct Loans

  • Graduate programs:
    • Up to $20,500/year, $100,000 lifetime borrowing limit
  • Existing unsubsidized loan borrowers can access unsubsidized loans under the current limits until completing their current degree, or for three additional years, whichever is less.

Undergraduate Student Loans 

  • There are no changes for undergraduate loans, although undergraduate loans will count towards the new lifetime limits.

 Parent PLUS Loans

  • Beginning on July 1, 2026, Parent PLUS loans will be capped at $20,000 per student per year, with a $65,000 lifetime limit per dependent student.
  • Existing Parent PLUS borrowers who have borrowed for their students prior to July 1, 2026, can continue with the current limits for 3 more years or until the student’s current degree ends.

Loan Proration for Students Enrolled Part-time

  • The bill includes a provision to prorate loan amounts based on enrollment for any student taking a less than full-time course load.
  • We are awaiting clarification from ED on how this will be applied to both graduate and undergraduate students.

Public Service Loan Forgiveness (PSLF)

  • No changes to PSLF provisions, although new limitations on eligibility have been proposed separately from the OBBBA in other regulatory action.