Federal Loan Changes

The One Big Beautiful Bill Act (OBBB/OB3), enacted by Congress and signed into law on July 4, 2025, includes several provisions affecting federal student loans. Key updates are outlined below, with additional information to be added to this site in the coming months. Unless otherwise specified, these changes will take effect on July 1, 2026.

Updates Affecting All Students

Annual loan limits will be prorated for students enrolled less than full-time. Undergraduate students taking fewer than 12 credits and Graduate students taking fewer than 6 credits will receive reduced annual loan amounts based on their enrollment status.

Graduate Students

Graduate PLUS Loans have been discontinued for new borrowers. Current borrowers may retain eligibility under a grandfathering provision for up to three academic years or for the remainder of their program, whichever is shorter.

Updated Loan Limits

  • Graduate programs:
    •  Up to $20,500 per year, based on enrollment intensity, with a $100,000 lifetime borrowing limit.
  • Professional programs (e.g.,Clinical Psychology (Psy.D):
    • Up to $50,000 per year, with a $200,000 lifetime borrowing limit.

Lifetime limits for graduate unsubsidized loans do not include any amounts borrowed at the undergraduate level.

Undergraduate Students and Parent PLUS Loans

Parent PLUS loans will be capped at $20,000 per student per year, with a $65,000 lifetime limit per dependent student. It is recommended that parents borrow no more than $16,250 per year to help ensure eligibility can be distributed evenly across a four-year program.

Borrowers who received Parent PLUS loans prior to July 1, 2026, may continue under the current limits for up to three additional years or until the student completes their program, whichever comes first.

Legacy provisions (grandfathering)

You may continue borrowing under the current rules (including Graduate PLUS Loans up to the Cost of Attendance) for up to three additional years if you meet both of the following conditions:

  • You are enrolled in the same credentialed program for the 2026–27 academic year that you were enrolled in prior to July 1, 2026.
  • You previously received a federal student loan (Subsidized, Unsubsidized, or PLUS) for that program, with funds disbursed before July 1, 2026.

Parent PLUS: Parents who borrowed a Parent PLUS Loan for the student’s program prior to July 1, 2026—or students who received a Direct Loan before that date—may continue borrowing under the current rules.

If you change programs or begin a new degree after July 1, 2026, the new loan limits will apply.

Additional Key Changes

  • Students who take an academic leave, withdraw, or change programs will be subject to the new loan limits upon returning and will forfeit any previously established eligibility.
  • A new aggregate borrowing cap of $257,500 has been established for all federal student loans (excluding Parent PLUS Loans borrowed on a student’s behalf). This includes up to $57,500 for undergraduate study, $100,000 for graduate programs, and $100,000 for professional programs. Lifetime limits will vary based on level of study and student status. Existing Unsubsidized Loan borrowers may continue under current limits for up to three additional years or until completion of their current program, whichever comes first.
  • Repayment options have been updated, including the introduction of a new standard repayment plan and a new income-driven plan (RAP). Several existing repayment plans will be phased out beginning July 1, 2028. For additional details, please visit studentaid.gov.
  • Professional students may be eligible to borrow up to $50,000 per year in Direct Unsubsidized Loans, with a $200,000 aggregate limit. The Department of Education is expected to release further guidance defining “professional degree” programs, which were not clearly specified when the legislation was enacted in July 2025.

Additional FAQs

What does it mean to be a “new” borrower?

New borrowers are defined as individuals who do not qualify for the legacy loan provision outlined below.

Legacy Loan Eligibility Criteria
A student (or parent on behalf of the student) must have borrowed a Direct Loan prior to July 1, 2026, while meeting all of the following conditions:

  • Enrolled in a degree program at LaSalle University,
  • Continuing in that same program for the Fall 2026 term, and
  • Progressing within the program’s published length, as determined by the academic program* at LaSalle University.

The legacy loan provision allows borrowers to continue under current loan rules for up to three additional academic years or for the remainder of the program’s published length, whichever is shorter. This eligibility will not extend beyond June 30, 2029.

*Contact your academic advisor if you have questions about the published length of your program.

If my student withdraws, do I lose the legacy provision?

Yes. Parent PLUS borrowers of students who withdraw or take a La Salle University–approved leave of absence during a required term will be considered new borrowers and will be subject to the updated loan limits upon the student’s return. The Parent PLUS loan legacy provision requires the student to maintain enrollment in all required terms associated with their academic program (fall and spring). The summer term is considered optional for undergraduate programs.

Are the new Parent PLUS Loan limits applied per student or per family?

Parent PLUS Loan limits ($20,000 per year and $65,000 aggregate) are applied per dependent student, not per family.

Which programs have been identified as professional programs?

Based on the federal definition of a professional program, the only program at La Salle University that currently meets the eligibility criteria is Clinical Psychology (Psy.D.).

If I withdraw from my Grad program, do I lose the legacy loan provision?

Yes. Borrowers who withdraw or take a La Salle University–approved leave of absence will be considered new borrowers and will be subject to the updated loan limits upon their return. The legacy provision requires the borrower to maintain enrollment in each required term associated with their academic program. If summer is a required term for the program, the student must be enrolled in the summer term to preserve the legacy loan provision.