Updated 04/27/26
The One Big Beautiful Bill Act (OB3), signed into law on July 4, 2025, is the budget reconciliation package that was approved by Congress to ensure continued funding for many federal expenditures. While it includes a broad range of topics and policy changes, we are focusing specifically on the aspects that impact federal student aid programs. We understand that students, families, and staff have questions, and so do we. Final regulations are not expected until June 2026. What we have listed below is our best understanding of what the federal rules will be. As we receive more guidance and official updates, we will continue to revise and expand this webpage to reflect the most accurate and actionable information available.
The Grad PLUS Loan program is ending due to the OB3. As of July 1, 2026, most students will no longer be able to borrow Grad PLUS Loans. However, some currently attending students may qualify for legacy provisions if they meet ALL the following requirements.
Eligible students may borrow Grad PLUS Loans for up to the standard length of their program or three years, whichever is less.
The other change for graduate student borrowers due to the OB3 is a change to lifetime aggregate loan limits. While the annual amount ($20,500 per academic year in Direct Unsubsidized) is not changing for Winthrop students, the lifetime aggregate limit will be $100,000 in graduate Direct Unsubsidized Loans for students who don't meet the legacy provisions listed above (instead of the current $138,500 for both undergrad and grad loans combined.)
Please see the sections for Federal Direct Loans for Less Than Full-Time Enrollment and Federal Direct Loans for Parent Borrowers (Parent PLUS).
Every Semester – Beginning in fall 2026, federal loans (Subsidized, Unsubsidized, and Graduate PLUS) will be reduced for students enrolled less than full-time (12 credit hours for undergraduate students and 9 credit hours for graduate students). Loan disbursements will be adjusted based on the number of credit hours a student is enrolled in compared to the number required for full-time status in their program. For example, an undergraduate student enrolled in 6 credit hours (half-time) would receive 50% of their loan. If the full-time loan amount is $3,750, the student would receive $1,875 for that semester.
Fall Semester – Students who begin the semester full-time but drop below full-time may see a reduction in their spring loan eligibility. Federal regulations require institutions to consider changes in fall enrollment when determining spring loan eligibility. For example, if an undergraduate student starts with 12 credit hours in the fall but drops to 6 credit hours, they would need to enroll in 18 credit hours in the spring to maintain full loan eligibility. If the student enrolls in only 12 credit hours in the spring, their loan eligibility will be reduced accordingly.
Spring Semester - Loan eligibility will depend on how many credit hours a student is still enrolled in at the end of fall term and how many credit hours they are enrolled in for the spring semester.
Summer Semester – Loan eligibility for the summer term will depend on the amount of loan funding used during the fall and spring semesters, as well as the number of credit hours attempted during those terms.
The OB3 establishes annual and lifetime aggregate limits on Parent PLUS Loans effective July 1, 2026. Parents of dependent undergraduate students will be able to borrow up to $20,000 per academic year and up to $65,000 over the student’s academic career. These limits apply per student, regardless of how many parents borrow on behalf of that student. This means that borrowing the annual maximum for four years would not fully cover the full length of a standard four-year program in many cases so you may want to borrow $16,250 or less each year for a four-year program. A legacy provision allows current Parent PLUS borrowers to continue borrowing under the existing rules (up to the Cost of Attendance minus other financial aid) for up to three years, or until the student reaches the standard time to complete their program, whichever comes first.
Repayment of Parent PLUS Loan debt will not restore or increase future borrowing eligibility.
Parent PLUS Loans will not be prorated based on less than full-time enrollment.
Any parent who borrows a Parent PLUS Loan on or after July 1, 2026 will be required to repay their loans under the new Standard Repayment Plan. Parent PLUS Loan debt incurred on or after this date will also be ineligible for Public Service Loan Forgiveness (PSLF).
The OB3 reduces the number of repayment plan options to a single income-based plan, Repayment Assistant Plan (RAP), and an updated Standard Repayment Plan. These new plans will begin July 1, 2026 for any new loans borrowed after that date. Current borrowers can also choose to switch to one of the new plans. If a current borrower does not take out any new loans after July 1, 2026 and is on the current standard, graduated, or extended repayment plan, they may keep that plan until they pay off their loans. Any borrower on a current income-based repayment (IBR) plan can maintain their current plan or switch between other available plans before July 1, 2028. Any outstanding loans utilizing one of the current IBR plans on July 1, 2028 will be converted to the new RAP.
The income-based plan, RAP, has varying monthly payments based on the borrower's and their spouse's AGI. The rate will be between 1-10% of AGI, but cannot be reduced lower than $10 per month. RAP is a 30 year repayment period and payments made under this plan can qualify for Public Service Loan Forgiveness. RAP also eliminates negative amortization so that a borrower's outstanding debt cannot increase even though they make their monthly payments.
The new Standard Repayment Plan is a fixed repayment plan over 10, 15, 20, or 25 years based on the total amount of borrowed loans or outstanding debt when opting into the Standard Repayment Plan. Any new loans borrowed after July 1, 2026 will automatically be put into the Standard Repayment Plan unless they choose another option when entering repayment.
Gainful Employment for All is a new metric placed on institutions to ensure the academic programs a school offers are worth the investment to students. The Department of Education will review the incomes of alumni with undergraduate degrees and high school graduates in similar career fields. If the high school graduate median income exceeds the median college graduate income from a particular degree program for 2 out of 3 years, that individual degree program may lose eligibility to offer Federal Direct Loans to students. Similarly, graduate degree recipients, income will be compared to undergraduate degrees in similar career fields. This will be implemented at some point in the future, it is not occurring this summer.
Part of the OB3 ensures that there is continued funding for the Federal Pell Grant program for the next two years.
Beginning in the 2026-27 academic year, the OB3 also eliminated Federal Pell Grant eligibility for a very small population of students. Students who are receiving enough non-federal grants and scholarships to cover 100% or more of their estimated Cost of Attendance and students with a Student Aid Index at least twice the value of the maximum Pell award in the given award year will no longer be eligible for Federal Pell Grants. Winthrop will contact the students who are affected by this (very small number).
If you have questions about how these changes affect you, please contact Office of Financial Aid. We are here to help you understand your eligibility.
Should you wish to look more in-depth into the changes to financial aid due to the One Big Beautiful Bill Act, we recommend the following resources:
Federal Student Aid's One Big Beautiful Bill Act Updates
Federal Student Aid's July 18, 2025 Dear Colleague Letter
