Enacted in July 2025, the One Big Beautiful Bill Act (OBBBA) made significant changes
in federal student loan programs as a part of the shifts in fiscal policy. While there are no changes to federal student
loans for the 2025–26 academic year, changes resulting from the legislation are slated for July 1, 2026.
Utah Valley University is continuing to track all of these changes and plans to update
this site as more clarification from the US Department of Education (ED) is released.
In the meantime, please note:
- There are no changes to financial aid for the 2025–26 academic year, stemming from
this legislation.
- Students starting graduate school before July 1, 2026, may still be eligible for Graduate
PLUS loans under current rules. Specific guidance on this transition is expected,
but not yet available.
We're here to help! If you have questions or would like to speak with a financial
aid staff member please see our hours of operation: https://www.uvu.edu/financialaid/
Important disclaimer: The information contained on this page is provided by UVU financial
aid staff to orient students to the changing landscape of federal student loan programs.
While it is based on our good faith understanding of the evolving federal standards,
it is not official guidance and should not be regarded by students as definitive.
Students should refer to federal governmental sources for official guidance. See studentaid.gov for more information.
What We Know As of September 2025
Graduate PLUS Loans
- Graduate PLUS loans will be phased out beginning on July 1, 2026; beginning on that
date, new loans will not be available for new borrowers.
- There will be some continuing eligibility for existing Graduate PLUS borrowers as
they complete their current programs.
New Graduate Unsubsidized Direct Loan Limits (Effective July 1, 2026)
- 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 program or for three additional years, whichever
is less.
Undergraduate Limits and Parent PLUS Loans
- There are no changes for undergraduate unsubsidized and subsidized loans.
- However, starting 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 before July 1,
2026, can continue with the current limits for 3 more years or until the student’s
program ends.
What Remains Unclear
Graduate PLUS Loans for Existing Borrowers
- It’s uncertain, but the current indication is that a student who borrows any Direct
Loan or Graduate PLUS before July 1, 2026, will remain eligible to borrow a Graduate
PLUS loan for the “3-year or until program completion” window so long as that student
remains in the same program at the same school for which they borrowed the pre-July
1, 2026 loan.
- Awaiting further guidance from ED.
Loan Proration for Part-Time Students
- The bill includes a provision to prorate loan amounts based on enrollment.
- This could mean that part-time students (e.g., those enrolled less than full-time)
would only be eligible for a portion of the annual loan limit.
- We are awaiting clarification from ED on how this will be applied to both graduate
and undergraduate students.
New Repayment Plans
- For new loans disbursed after July 1, 2026, the bill eliminates current income-driven
repayment plans (IBR, PAYE, SAVE) and replaces them with a new Repayment Assistance
Program (RAP).
- Students who have borrowed loans before July 1, 2026, and will borrow a new loan after
July 1, 2026, are limited to the new RAP or the standard plans for the new loan.
- RAP borrowers will not be locked into a 30-year plan. They can switch to a standard
plan, which ranges from 10 to 25 years.
- Borrowers with no new loans made on or after July 1, 2026, can continue to be eligible
to enroll in the current Standard, current Income Based (IBR), Graduated, and Extended
repayment plans, and could also opt in to the new RAP. Current borrowers enrolled
in ICR, PAYE, or SAVE plans must transition to a new repayment plan by July 1, 2028.
If no selection is made by that date, they will be moved into RAP.
- More information on the new RAP is forthcoming.
