Federal student aid changes (OBBBA)

Most changes—including new loan limits and repayment options—will apply starting July 1, 2026 for the 2026–27 academic year.  We are monitoring federal guidance and will update you as details are finalized.

If you are currently receiving federal loans, your eligibility may continue under existing rules for a limited period. However, future borrowing may be subject to the new limits beginning July 1, 2026.

Start by looking at when you first borrowed loans for your current program. If your federal loans for this program were disbursed before July 1, 2026, you likely fall under the “current borrower” category. If not, you will be regarded as a “new borrower,” even if you borrowed in the past for a different program.

Switching to a new program (even at the same school) can reset your borrowing category. That means your loan limits and eligibility rules may shift to those of a “new borrower,” even if you previously qualified as a “current borrower” in your old program.

If you are enrolled and borrowing federal loan funds prior to July 1, 2026, you may be eligible to continue under the “old” rules (including access to Graduate PLUS loans) through a Legacy Provision.

To qualify for the Legacy Provision, you must meet ALL three requirements:

1. Enrolled: You must be admitted, enrolled, and attending classes in your current program prior to July 1, 2026.
2. Borrowed: You must have received a Direct Unsubsidized or PLUS loan for your current program prior to July 1, 2026.
3. Timeline: You may remain under this provision only for the lesser of three years or the remaining time to complete your specific program.
   
   

Loss of Legacy Provision

Students who meet the Legacy Provision will lose the exception and be subject to the new more restrictive rules if any of the following occur after July 1, 2026:

• Student changes their program of study (not including changes of Major for undergraduate programs).
• Student withdraws from all courses within a term after beginning attendance.
• Student takes a Leave of Absence.

The new law replaces most existing income-driven repayment plans with a new framework for federal student loan repayment. If you borrow additional loan funds on or after July 1, 2026, your repayment options will be limited to the tiered Standard Plan and the Repayment Assistance Plan (RAP). More details will be available later.

Yes, PSLF remains in place, though a new loan repayment plan (the RAP plan) will replace older options such as SAVE and PAYE for loans disbursed after July 1, 2026. Eligible borrowers can continue to work toward forgiveness. The new framework for federal student loan repayment outlined in the new law may make it easier for some borrowers to qualify, especially those with lower incomes. Further details on how PSLF will interact with the new framework are subject to pending rule-making.

If you have questions about how these changes affect your specific situation, please contact the Student Financial Services Office at sfs@redlands.edu or (909) 748-8047. We are monitoring federal guidance and will provide updates as additional details become available.

Annual Direct Loan limits for undergraduate students remain the same:

• Dependent students: $5,500 to $7,500 per year (based on grade level)
• Independent students: up to $9,500 to $12,500 per year

Current aggregate limits remain:

• Dependent: $31,000
• Independent: $57,500

New borrowers: 

• Parents who borrow their first Parent PLUS Loan on or after July 1, 2026, will be considered NEW borrowers. These borrowers will be subject to updated Parent PLUS Loan borrowing limits.
• The combined annual borrowing limit for all parents will be $20,000 per year per dependent student, with a $65,000 aggregate limit per dependent student (without regard to amounts forgiven, repaid, canceled, or discharged).

Current borrowers who borrowed a loan before July 1, 2026:

• Current Parent PLUS Loan borrowers are those who obtained a Parent PLUS Loan before July 1, 2026, for a dependent student’s current academic program, provided that the student remains in the same program. These borrowers may borrow loans up to the current limits for up to three (3) academic years, or the remainder of their dependent student’s expected time to degree, whichever is less.

Pell Grant eligibility requirements remain based on financial need and enrollment status. Any future federal changes will be communicated if they occur.

Beginning July 1, 2026:

• The Graduate PLUS Loan will be eliminated for new borrowers.
• Graduate students will be limited to:
• $20,500 per year in Direct Unsubsidized Loans
• $100,000 lifetime graduate loan limit

A combined lifetime federal loan limit of $257,500 (including undergraduate borrowing) will apply.

Students who receive a Federal Direct Loan before July 1, 2026, may be able to continue borrowing for their current program for a limited period (generally up to three years or until program completion, whichever comes first).

CURRENT graduate or professional borrowers include those who borrowed federal graduate-level loans, including Direct Unsubsidized or Graduate PLUS Loans, for a term that began before July 1, 2026, and remains enrolled in the same graduate or professional program at the same institution. Under the proposed regulations, eligible graduate and professional students may continue to borrow under the current loan rules for a limited period based on their “expected time to credential.” 

The proposed language indicates eligibility will be determined using an “expected time to completion,” as of July 1, 2026, which would generally be the shorter of: 

• Up to three academic years. (The U.S. Department of Education has not yet clarified how these will be calculated.) 

• The remaining length of your program at the time eligibility is determined. 

Time already completed in your program is expected to count toward this limit. Students may not automatically receive three additional years of borrowing if they are already partway through their program. 

**Details about how this timeframe will be calculated across different programs are still forthcoming. We will continue to publish updates as we receive them.

Grad PLUS will no longer be available to new borrowers starting in 2026–27, so it’s important to explore other funding options early. These may include:

• A list of private education lenders options
• Employer-sponsored education benefits or public service programs
• Graduate payment options 
• External scholarships or fellowships

If you expect to need more funding than the new federal loan limits allow, contact Student Financial Services to discuss options that may fit your program and timeline.

Under OBBBA, your loan eligibility is adjusted based on your enrollment level. If you drop below full-time enrollment, your available loan amount may be prorated, even if you remained eligible for the full amount in past years.

**Guidance on how loans are to be prorated has not yet been provided by the U.S. Department of Education.