The One Big Beautiful Bill Act (OBBBA) is a major federal law passed by Congress and signed on July 4, 2025, that makes wide-ranging changes to how the federal government funds and administers student financial aid.
As a result of this legislation, significant updates to federal financial aid and student loan policies are being implemented. These changes will affect FAFSA calculations, repayment plans, and graduate student borrowing limits beginning in the 2025–26 and 2026–27 academic years. Students are encouraged to review these changes carefully and plan accordingly.
New federal regulations are reshaping graduate student borrowing limits, introducing lower caps for many academic programs.
According to the U.S. Department of Education, “A negotiating committee convened by the agency has proposed a consensus definition that designates Medicine (M.D.), Dentistry (D.D.S./D.M.D.), Law (L.L.B./J.D.), and several other high-cost programs as eligible for a $200,000 borrowing limit.” All other graduate and doctoral programs’ borrowing limit has been reduced from its $200,000 cap to $100,000. Students should plan their borrowing carefully to avoid reaching these limits.
It is important to note that the federal definition of a “professional degree” does not change the academic value, rigor, or career outcomes of any degree program. This designation is used only for federal financial aid and loan processing purposes, specifically to determine how funds are distributed and which borrowing limits apply.
Beginning July 1, 2026, students who already have federal student loans and do not consolidate them may be able to keep access to some older repayment plans.
This is often referred to as being “grandfathered in.” However, new borrowers, as well as borrowers who consolidate their loans or take out new loans after the rule changes, will have to follow the new repayment rules and limits. In addition, beginning July 1, 2026, future borrowers will no longer have access to flexible repayment plans such as Income-Based Repayment (IBR), Income-Contingent Repayment (ICR), or Pay As You Earn (PAYE).
Students should consult with the Financial Aid Office to understand which repayment options are currently available to them.
Students who are already in graduate school should also pay close attention to these updates. Certain Parent PLUS borrowers may become eligible for repayment plans after consolidating their loans.
However, loan consolidation must be completed by June 30, 2026, for borrowers to retain access to IBR, ICR, and PAYE plans. Federal Direct Graduate PLUS Loans are being phased out and will no longer be available to new borrowers starting July 1, 2026.
When asked about this topic, Jennifer Wise, Chief Communications Officer at Georgia Southern, said, “We await further guidance from the U.S. Department of Education as it undergoes the implementation process resulting from the recent reconciliation bill. Students are encouraged to continue to work with the Financial Aid Office to understand the options available to them.”
With these changes still being implemented, it is important for students to stay informed and work closely with the Financial Aid Office to make the best decisions for their educational financing.
