Upcoming Federal Student Loan Changes

Federal Student Loan Changes from the One Big Beautiful Bill Act 

On July 4, 2025, President Trump signed the One Big Beautiful Bill Act into law. Several provisions affect federal student loan borrowing and are expected to take effect July 1, 2026.

While the U.S. Department of Education has not yet released final implementation guidance, the University of Rhode Island is monitoring federal updates closely and will revise this page as additional information becomes available. Details below are based on current rules and may change based on federal guidance.

Parent PLUS Loans – New Annual and Aggregate Limits

Beginning on July 1, 2026, parents of dependent undergraduate students borrowing for the first time may only borrow a Federal Direct PLUS Loan for up to:

  • $20,000 annually per dependent student 
  • $65,000 aggregate (total) per dependent student  

The aggregate limit is per student.  

Because the total Parent PLUS borrowing limit is now $65,000, families who borrow the full annual amount ($20,000) each year for a four-year undergraduate program may reach that limit before the student graduates. If that happens, Parent PLUS loans would no longer be available for the students’ remaining time in the program.

Parents of students who meet the following criteria are exempt from the new limits:

  • Student remains continuously enrolled in the same program of study (change in major is okay) as of June 30, 2026 AND
  • Parent borrowed a PLUS loan for that student prior to July 1, 2026 OR the student borrowed a Federal Direct student loan before that date

Parents of eligible students may continue borrowing for up to three academic years or until the student completes the undergraduate degree, whichever occurs first.

Loan Reduction for Part-Time Enrollment – Subsidized/Unsubsidized Loans

Beginning on July 1, 2026 students enrolled less than full-time will not qualify for the full annual loan limit.  Federal Direct student loan (Subsidized/Unsubsidized) eligibility will be prorated based on the number of credits in which they are enrolled. 

Full-time enrollment is defined as 12 credits for undergraduate students and 9 credits for graduate students.  

Graduate PLUS Loans – Not Available to New Borrowers

Beginning on July 1, 2026 the Federal Direct Graduate PLUS Loan program will no longer be available to new borrowers. Students who received a Federal Direct Loan (Subsidized, Unsubsidized, or PLUS) before July 1, 2026 and who remain continuously enrolled in the same graduate-level program at URI in which they were enrolled on June 30, 2026 may continue to borrow Graduate PLUS loans for up to three academic years or until completion of their credential, whichever occurs first.

New Federal Loan Limits for Graduate Students – Unsubsidized Loans

Graduate students may borrow up to $20,500 per academic year through the Federal Direct Unsubsidized Loan program. The lifetime borrowing limit for a graduate student is $100,000, counting only loans borrowed as a graduate student.

New Federal Loan Limits for Professional Students

Students enrolled in graduate programs designated as “Professional” by federal regulation may borrow up to $50,000 per academic year through the Federal Direct Unsubsidized Loan.

Loan Change FAQs: Federal Loan Changes Effective July 1, 2026

Will Parent PLUS Loans still be available?

Yes, but with new limits beginning July 1, 2026:

  • Up to $20,000 per student per academic year
  • Up to $65,000 total per student over the student’s undergraduate enrollment

Could we run out of Parent PLUS eligibility before graduation?

Possibly. Families who borrow the maximum each year may reach the $65,000 total limit before the student completes a four-year degree. If that happens, Parent PLUS loans would no longer be available for the remaining enrollment period.  Families may wish to consider private student loans to supplement their limits.

Are any families expected to be “grandfathered” under prior rules?

Federal law includes a transition provision. Families may continue borrowing under prior rules if:

  • The student was enrolled in the same degree program on June 30, 2026 (major changes permitted), and
  • The parent or student borrowed a Federal Direct Loan before July 1, 2026.

Parents of eligible students may continue borrowing for up to three academic years or until the student completes the undergraduate degree, whichever occurs first. Final federal guidance is still pending.

Will student loans change if I attend part-time?

Yes. Beginning July 1, 2026, students enrolled less than full-time will not qualify for the full annual Federal Direct Loan amount. Loan eligibility will be prorated based on enrolled credits (similar to how Pell Grant eligibility is calculated).

Full-time enrollment is 12 credits for undergraduate students and 9 credits for graduate students.

Is the Graduate PLUS Loan being eliminated?

Beginning July 1, 2026, the Federal Direct Graduate PLUS Loan is expected to be unavailable to new borrowers. Students who received a Federal Direct Loan (Subsidized, Unsubsidized, or PLUS) before July 1, 2026 and who remain continuously enrolled in the same program may continue to borrow Graduate PLUS loans for up to three academic years or until they complete their credential, whichever comes first. Final federal guidance is still pending.

What should families do now to prepare?

  • Plan borrowing across all years, not just the first year.
  • Review expected time to degree completion and enrollment plans (full-time vs. part-time).
  • Contact Enrollment Services if you anticipate reaching borrowing limits.

Will these details change?

Possibly. The federal government has not issued final implementation guidance. URI will update families promptly as additional information becomes available.