One Big Beautiful Bill Act (OBBBA)
What You Need to Know
On July 4, 2025, the One Big Beautiful Bill Act (OBBBA) was signed into law through the budget reconciliation process. The law includes major changes to student financial aid programs, including significant revisions to federal student loans. Most of these changes take effect for enrollment periods beginning on or after July 1, 2026.
Final regulations and implementation guidance have now been released, and the Department of Education continues to issue additional sub-regulatory guidance related to these changes. Loyola University Chicago's Financial Aid Office is actively reviewing and implementing this guidance as quickly as possible. We will continue to share updates as additional information becomes available from the U.S. Department of Education and other relevant authorities.
You can review the changes to federal student loans for health professional students by academic level. (PDF)
Changes to the Federal Aid Programs Under OBBBA
Graduate PLUS Loans
Elimination of the Graduate PLUS loan for all graduate and professional students.
- Starting July 1, 2026, new borrowers will no longer be eligible for the federal Grad PLUS Loan.
- However, if you are enrolled in your current program and have received a disbursement of a federal Direct loan for your current program of study (including Direct unsubsidized loans or Graduate PLUS loans) before July 1, 2026, you will still be able to access Grad PLUS for up to three additional years or until your program ends—whichever comes first.
- This “legacy clause” applies only to loans borrowed for your current program. If you borrowed federal loans for a previous program and start a new one after July 1, 2026, you won’t be eligible for the PLUS loan in your new program.
- Students must remain continuously enrolled to maintain eligibility under the legacy clause. Withdrawals or leaves of absence for any reason may result in forfeiture of legacy status.
Federal Loan Limits
New Graduate Loan Limits: an annual limit of $20,500 for graduate students and $50,000 for professional students. The aggregate borrowing limit is capped at $100,000 for graduate students and $200,000 for professional students, not including any undergraduate borrowing.
- However, if you are enrolled in your current program and have received a disbursement of a federal Direct loan for your current program of study (including Direct unsubsidized loans or Graduate PLUS loans) loan before July 1, 2026, you will still be able to access federal loans at the current levels, including access to the Grad PLUS for up to three additional years or until your program ends—whichever comes first.
- This "legacy clause" applies only to loans borrowed for your current program. If you borrowed federal loans for a previous program and start a new one after July 1, 2026, you won’t be eligible for the PLUS loan in your new program.
- Students must remain continuously enrolled to maintain eligibility under the legacy clause. Withdrawals or leaves of absence for any reason may result in forfeiture of legacy status.
- Under the new bill, a professional degree is a degree that signifies both completion of the academic requirements for beginning practice in a given profession, and a level of professional skill beyond that normally required for a bachelor’s degree; is generally at the doctoral level, and requires at least six academic years of postsecondary education coursework for completion, including at least two years of postbaccalaureate level coursework; generally requires professional licensure to begin practice; and includes a four-digit program CIP code in the same intermediate group as the following fields: Pharmacy (Pharm.D.), Dentistry (D.D.S. or D.M.D.), Veterinary Medicine (D.V.M.), Chiropractic (D.C. or D.C.M.), Law (L.L.B. or J.D.), Medicine (M.D.), Optometry (O.D.), Osteopathic Medicine (D.O.), Podiatry (D.P.M., D.P., or Pod.D.), Theology (M.Div., or M.H.L.), and Clinical Psychology (Psy.D. or Ph.D.).
- A professional student may not receive Title IV aid as an undergraduate student for the same period of enrollment and must be enrolled in a program leading to a professional degree.
- Students may not opt out of legacy eligibility.
Loan Proration for Less Than Full-Time Enrollment
Students who are enrolled less than full-time over the course of an academic year will have their loan eligibility prorated in direct proportion to the percentage of full-time status for which they are enrolled.
Federal Loan Repayment Changes
View a summary chart of student loan repayment plan options as of July 1, 2026. (PDF)
View a repayment plan flowchart. (PDF)
Repayment Plan Options for New Student Loans (Direct Subsidized, Direct Unsubsidized, Graduate PLUS) disbursed on or after July 1, 2026 (not including Parent PLUS)
- Creation of a new Income-Driven Repayment Plan, called the Repayment Assistance Plan (RAP).
- The new RAP plan stipulates that if married and filing separately, a student’s spouse’s AGI and number of dependents are not included in the payment calculation.
- RAP has a minimum monthly payment of $10, but payment is based on 1-10 percent of income based on AGI over a 30-year repayment term.
- Students with dependents receive $50 off the monthly payment amount per dependent.
- This plan eliminates negative amortization, as any unpaid interest after payment is subsidized.
- There is no cap on a student’s monthly payment outside of the 10 percent of income based on AGI, even if the payment exceeds the amount required under a standard repayment plan.
- If a borrower makes an on-time payment that reduces their principal by less than $50, the Department of Education will make a payment to the principal, up to the amount paid, minus what was applied to the principal, or $50, whichever is less.
- Time-based forgiveness under RAP requires 30 years of repayment. Payments made under RAP do not count toward time-based forgiveness under IBR.
- Any new loans first disbursed on or after July 1, 2026 (including loans for students eligible under the legacy clause), can be repaid using only one of two plans: a new standard repayment plan with fixed monthly payments and fixed terms ranging from 10 to 25 years based on the amount borrowed or RAP.
- Current borrowers with no new loans first disbursed on or after July 1, 2026, are eligible to enroll in the current Standard, Graduated, Extended, or current income-driven repayment plans, including IBR or ICR, until June 30, 2028. Current borrowers with no new loans first disbursed on or after July 1, 2026, are eligible to enroll in PAYE before July 1, 2027, due to actions related to the Saving on a Valuable Education (SAVE) plan litigation. This action is separate from OBBBA repayment changes. Borrowers enrolled in PAYE before July 1, 2027, may remain in PAYE through June 30, 2028. No new enrollments under these plans are allowed after July 1, 2028.
- Students may remain enrolled in IBR indefinitely, but all students enrolled in ICR or PAYE must transition to a different repayment plan (Current IBR, standard, or RAP) by July 1, 2028. If no selection is made by that date, students will be automatically moved to RAP.
Repayment Plan Options for Consolidation Loans
- A consolidation loan taken out by a borrower before July 1, 2026, is treated like any other eligible loan. Borrowers currently in an income-driven plan have until July 1, 2028, to select a standard plan, IBR, or RAP.
- If the consolidation loan was used to pay off a Parent PLUS loan, it must enter repayment under ICR before July 1, 2028, to become eligible for IBR.
- If the borrower takes no action by that date, all eligible loans will automatically be moved to RAP, and any loans not eligible for RAP will be placed into IBR.
Loan Rehabilitation Terms
- Borrowers can rehabilitate a defaulted loan twice, instead of once as currently allowed. The minimum rehab payment for Direct Loans changes to $10.
Loan Deferment Options
- Borrowers with loans made on or before July 1, 2027, are still able to use economic hardship and unemployment deferments as outlined in the master promissory note. Once all borrowers’ loans made before July 1, 2027, are paid in full, economic hardship and unemployment deferrals will cease.
- New borrowers with loans first disbursed on or after July 1, 2027, will not be eligible for those deferment options.
Loan Forbearance Options
- Loans first disbursed on or before June 30, 2027, are eligible for a forbearance up to 12 months at a time, with a cumulative limit of three years.
- Loans first disbursed on or after July 1, 2027, are eligible for forbearance for up to nine months in any two-year period.
What Does This Mean?
These changes mean it’s more important than ever to understand how you plan to pay for your degree. It may also mean that many students will need to rely on other resources, such as outside scholarships or private loan borrowing, to help cover any remaining educational costs after federal aid eligibility has been exhausted.
Please visit the following links for more information:
Federal Student Aid (FSA) System Updates
The Department of Education has announced that several FSA systems, including the Free Application for Federal Student Aid (FAFSA®), were updated effective April 26, 2026.
The layout in which schools receive a student's FAFSA® (also called the ISIR) has changed. Our current student information system, LOCUS, is not configured to accept the new ISIR layout format, so we will not be able to process your ISIR or create an award package until our internal systems are updated.
Students who submitted their FAFSA® and other documentation after April 26, 2026, should expect delays in the processing of their awards. Students who have not yet completed their FAFSA® are encouraged to do so. Processing may resume once our internal systems are updated. We are hopeful to have the technical changes in place to continue processing awards and other FAFSA® corrections sometime in June.
What’s Next?
Loyola University Chicago’s Financial Aid Office continues to review the bill’s contents and will provide additional guidance below as we learn more from the Department of Education.
Our office is closely tracking these changes and will update this site to help students and alumni understand what they may mean for their financial aid. As soon as we have more concrete answers from the Department of Education, we’ll post updates.
In the meantime, there is no change to financial aid for the 2025–26 academic year. We understand this is a lot to take in, and we’re here to support you as we all learn more.
The National Association of Student Financial Aid Administrators (NASFAA) has put together a helpful chart that reviews all the provisions of the reconciliation bill. (PDF)
What You Need to Know
On July 4, 2025, the One Big Beautiful Bill Act (OBBBA) was signed into law through the budget reconciliation process. The law includes major changes to student financial aid programs, including significant revisions to federal student loans. Most of these changes take effect for enrollment periods beginning on or after July 1, 2026.
Final regulations and implementation guidance have now been released, and the Department of Education continues to issue additional sub-regulatory guidance related to these changes. Loyola University Chicago's Financial Aid Office is actively reviewing and implementing this guidance as quickly as possible. We will continue to share updates as additional information becomes available from the U.S. Department of Education and other relevant authorities.
You can review the changes to federal student loans for health professional students by academic level. (PDF)
Changes to the Federal Aid Programs Under OBBBA
Graduate PLUS Loans
Elimination of the Graduate PLUS loan for all graduate and professional students.
- Starting July 1, 2026, new borrowers will no longer be eligible for the federal Grad PLUS Loan.
- However, if you are enrolled in your current program and have received a disbursement of a federal Direct loan for your current program of study (including Direct unsubsidized loans or Graduate PLUS loans) before July 1, 2026, you will still be able to access Grad PLUS for up to three additional years or until your program ends—whichever comes first.
- This “legacy clause” applies only to loans borrowed for your current program. If you borrowed federal loans for a previous program and start a new one after July 1, 2026, you won’t be eligible for the PLUS loan in your new program.
- Students must remain continuously enrolled to maintain eligibility under the legacy clause. Withdrawals or leaves of absence for any reason may result in forfeiture of legacy status.
Federal Loan Limits
New Graduate Loan Limits: an annual limit of $20,500 for graduate students and $50,000 for professional students. The aggregate borrowing limit is capped at $100,000 for graduate students and $200,000 for professional students, not including any undergraduate borrowing.
- However, if you are enrolled in your current program and have received a disbursement of a federal Direct loan for your current program of study (including Direct unsubsidized loans or Graduate PLUS loans) loan before July 1, 2026, you will still be able to access federal loans at the current levels, including access to the Grad PLUS for up to three additional years or until your program ends—whichever comes first.
- This "legacy clause" applies only to loans borrowed for your current program. If you borrowed federal loans for a previous program and start a new one after July 1, 2026, you won’t be eligible for the PLUS loan in your new program.
- Students must remain continuously enrolled to maintain eligibility under the legacy clause. Withdrawals or leaves of absence for any reason may result in forfeiture of legacy status.
- Under the new bill, a professional degree is a degree that signifies both completion of the academic requirements for beginning practice in a given profession, and a level of professional skill beyond that normally required for a bachelor’s degree; is generally at the doctoral level, and requires at least six academic years of postsecondary education coursework for completion, including at least two years of postbaccalaureate level coursework; generally requires professional licensure to begin practice; and includes a four-digit program CIP code in the same intermediate group as the following fields: Pharmacy (Pharm.D.), Dentistry (D.D.S. or D.M.D.), Veterinary Medicine (D.V.M.), Chiropractic (D.C. or D.C.M.), Law (L.L.B. or J.D.), Medicine (M.D.), Optometry (O.D.), Osteopathic Medicine (D.O.), Podiatry (D.P.M., D.P., or Pod.D.), Theology (M.Div., or M.H.L.), and Clinical Psychology (Psy.D. or Ph.D.).
- A professional student may not receive Title IV aid as an undergraduate student for the same period of enrollment and must be enrolled in a program leading to a professional degree.
- Students may not opt out of legacy eligibility.
Loan Proration for Less Than Full-Time Enrollment
Students who are enrolled less than full-time over the course of an academic year will have their loan eligibility prorated in direct proportion to the percentage of full-time status for which they are enrolled.
Federal Loan Repayment Changes
View a summary chart of student loan repayment plan options as of July 1, 2026. (PDF)
View a repayment plan flowchart. (PDF)
Repayment Plan Options for New Student Loans (Direct Subsidized, Direct Unsubsidized, Graduate PLUS) disbursed on or after July 1, 2026 (not including Parent PLUS)
- Creation of a new Income-Driven Repayment Plan, called the Repayment Assistance Plan (RAP).
- The new RAP plan stipulates that if married and filing separately, a student’s spouse’s AGI and number of dependents are not included in the payment calculation.
- RAP has a minimum monthly payment of $10, but payment is based on 1-10 percent of income based on AGI over a 30-year repayment term.
- Students with dependents receive $50 off the monthly payment amount per dependent.
- This plan eliminates negative amortization, as any unpaid interest after payment is subsidized.
- There is no cap on a student’s monthly payment outside of the 10 percent of income based on AGI, even if the payment exceeds the amount required under a standard repayment plan.
- If a borrower makes an on-time payment that reduces their principal by less than $50, the Department of Education will make a payment to the principal, up to the amount paid, minus what was applied to the principal, or $50, whichever is less.
- Time-based forgiveness under RAP requires 30 years of repayment. Payments made under RAP do not count toward time-based forgiveness under IBR.
- Any new loans first disbursed on or after July 1, 2026 (including loans for students eligible under the legacy clause), can be repaid using only one of two plans: a new standard repayment plan with fixed monthly payments and fixed terms ranging from 10 to 25 years based on the amount borrowed or RAP.
- Current borrowers with no new loans first disbursed on or after July 1, 2026, are eligible to enroll in the current Standard, Graduated, Extended, or current income-driven repayment plans, including IBR or ICR, until June 30, 2028. Current borrowers with no new loans first disbursed on or after July 1, 2026, are eligible to enroll in PAYE before July 1, 2027, due to actions related to the Saving on a Valuable Education (SAVE) plan litigation. This action is separate from OBBBA repayment changes. Borrowers enrolled in PAYE before July 1, 2027, may remain in PAYE through June 30, 2028. No new enrollments under these plans are allowed after July 1, 2028.
- Students may remain enrolled in IBR indefinitely, but all students enrolled in ICR or PAYE must transition to a different repayment plan (Current IBR, standard, or RAP) by July 1, 2028. If no selection is made by that date, students will be automatically moved to RAP.
Repayment Plan Options for Consolidation Loans
- A consolidation loan taken out by a borrower before July 1, 2026, is treated like any other eligible loan. Borrowers currently in an income-driven plan have until July 1, 2028, to select a standard plan, IBR, or RAP.
- If the consolidation loan was used to pay off a Parent PLUS loan, it must enter repayment under ICR before July 1, 2028, to become eligible for IBR.
- If the borrower takes no action by that date, all eligible loans will automatically be moved to RAP, and any loans not eligible for RAP will be placed into IBR.
Loan Rehabilitation Terms
- Borrowers can rehabilitate a defaulted loan twice, instead of once as currently allowed. The minimum rehab payment for Direct Loans changes to $10.
Loan Deferment Options
- Borrowers with loans made on or before July 1, 2027, are still able to use economic hardship and unemployment deferments as outlined in the master promissory note. Once all borrowers’ loans made before July 1, 2027, are paid in full, economic hardship and unemployment deferrals will cease.
- New borrowers with loans first disbursed on or after July 1, 2027, will not be eligible for those deferment options.
Loan Forbearance Options
- Loans first disbursed on or before June 30, 2027, are eligible for a forbearance up to 12 months at a time, with a cumulative limit of three years.
- Loans first disbursed on or after July 1, 2027, are eligible for forbearance for up to nine months in any two-year period.
What Does This Mean?
These changes mean it’s more important than ever to understand how you plan to pay for your degree. It may also mean that many students will need to rely on other resources, such as outside scholarships or private loan borrowing, to help cover any remaining educational costs after federal aid eligibility has been exhausted.
Please visit the following links for more information:
Federal Student Aid (FSA) System Updates
The Department of Education has announced that several FSA systems, including the Free Application for Federal Student Aid (FAFSA®), were updated effective April 26, 2026.
The layout in which schools receive a student's FAFSA® (also called the ISIR) has changed. Our current student information system, LOCUS, is not configured to accept the new ISIR layout format, so we will not be able to process your ISIR or create an award package until our internal systems are updated.
Students who submitted their FAFSA® and other documentation after April 26, 2026, should expect delays in the processing of their awards. Students who have not yet completed their FAFSA® are encouraged to do so. Processing may resume once our internal systems are updated. We are hopeful to have the technical changes in place to continue processing awards and other FAFSA® corrections sometime in June.
What’s Next?
Loyola University Chicago’s Financial Aid Office continues to review the bill’s contents and will provide additional guidance below as we learn more from the Department of Education.
Our office is closely tracking these changes and will update this site to help students and alumni understand what they may mean for their financial aid. As soon as we have more concrete answers from the Department of Education, we’ll post updates.
In the meantime, there is no change to financial aid for the 2025–26 academic year. We understand this is a lot to take in, and we’re here to support you as we all learn more.
The National Association of Student Financial Aid Administrators (NASFAA) has put together a helpful chart that reviews all the provisions of the reconciliation bill. (PDF)