The One Big Beautiful Bill Act — also referred to as the OBBBA — is a federal law that changes how federal student loan funding works. Starting July 1, 2026, new rules will reshape how graduate students, parents and part-time learners can borrow.
One thing to know is that if you already received federal student loans before the July date, you may still be able to borrow under the previous rules. The new loan limits and rules will apply to new borrowers and students whose situation changes, such as if you change your degree. This article walks through what's changing, what isn't and what ASU Online students should do now.
Are you a legacy or new borrower?
With these changes, it’s important to understand whether you’re considered a legacy or new borrower, as each group is subject to different rules.
To qualify as a legacy borrower, you must have received a federal direct student loan disbursed before July 1, 2026, and you must remain continuously enrolled in the same program at the same school.
If both conditions are met, you can continue borrowing under the current rules, which last for the length of time it would take for a full-time student to complete the program. Generally, this is considered five years for undergraduate students and two years for graduate students.
If you take a leave of absence, transfer to a different institution or switch programs after the new rules begin, you may lose your legacy borrowing status and become subject to the new rules.
Changes for undergraduate students
For many undergraduates, annual loan limits are not changing. Dependent undergraduates can still borrow $5,500 to $7,500 per year in federal direct subsidized and unsubsidized loans. Independent undergraduates — and dependent students whose parents are unable to get Parent PLUS — can still borrow between $9,500 to $12,500 per year.
There is one significant change that will affect students taking a less than full-time course load. Beginning with the 2026–27 academic year, students enrolled less than full-time will have their federal loan amounts prorated based on their enrollment level. This means you will not be eligible to receive the full annual loan limits, which could impact how you pay for tuition.
ASU Online understands many students take one or two courses per semester as they manage their career and family obligations. Use our loan estimator tool to understand how this might impact you and to plan your finances ahead of time if you rely on federal loans to cover tuition costs.
Changes for graduate students
For graduate students, Graduate PLUS loans are eliminated for new borrowers, and new borrowing caps have been implemented.
Previously, Graduate PLUS allowed students to borrow up to the full cost of attendance.
For legacy borrowers who received a Graduate PLUS loan before that date, access can continue for the length of time it would take a full-time student to complete the program, which is generally two years for graduate students.
However, new graduate borrowers face two different sets of limits depending on their degree type:
- Graduate students pursuing degrees designated as a “professional” degree get a higher annual limit of $50,000 annually, with a total lifetime cap of $200,000.
- All other graduate students are limited to borrowing up to $20,500 annually, with a lifetime cap of $100,000.
Please note: The definition of these “professional” programs is being finalized by the Department of Education through negotiated rulemaking. See below for the currently recognized list.
What a “professional” graduate degree means
Under the federal framework, a “professional” program is defined as an advanced degree that typically requires licensure to work in the field. These programs generally require at least six years of combined post-secondary education (which includes at least two years of post-baccalaureate coursework), require licensure to begin practicing and are classified under specific program classification codes aligned with recognized fields.
“Professional” programs currently designated with the higher $50,000 annual and $200,000 lifetime limit are:
- Pharmacy (PharmD)
- Dentistry (DDS or DMD)
- Veterinary Medicine (DVM)
- Chiropractic (DC or DCM)
- Law (LLB or JD)
- Medicine (MD)
- Optometry (OD)
- Osteopathic Medicine (DO)
- Podiatry (DPM, DP, or PodD)
- Theology (MDiv or MHL)
Students in all other graduate programs, including nursing, physician assistant, physical therapy, occupational therapy and similar health programs, are currently subject to the lower $20,500 annual and $100,000 aggregate cap for unsubsidized loans.
ASU only currently offers JD and MD programs that would be labeled as a “professional” program.
What’s changing for parents
Parent PLUS loans are also subject to caps for new borrowers. However, the legacy plan for Parent PLUS is different than for student borrowers.
If the student had received federal direct student loans disbursed before July 1, 2026, the parent may qualify for legacy PLUS loan eligibility — even if the parent has not previously taken out a PLUS loan. Legacy protection allows the parent to continue borrowing under the previous rules for the length of time it would take a full-time student to complete the program, which is five years for undergraduate students.
For new borrowers not covered by legacy provisions, a $20,000-per-year-per-student cap applies, with a combined lifetime limit of $65,000 per dependent student across all Parent PLUS borrowers for that student.
What's not changing
The OBBBA includes many changes, so here is a breakdown of what isn’t changing:
- Undergraduate annual loan limits are not changing.
- Public Service Loan Forgiveness remains in place. Payments under the new Repayment Assistance Plan count toward PSLF, provided all other eligibility conditions are met.
- Federal Work-Study programs are not affected.
- Pell Grants for most students are unchanged. A narrow eligibility change applies to students with a Student Aid Index above a specific threshold, but most Pell recipients are not affected.
- Your ASU curriculum, faculty and degree are not affected in any way.
What ASU students can do right now
- Confirm your legacy status. If you received a federal direct loan disbursed before July 1, 2026, and you're continuing in the same program at ASU, you likely qualify for legacy borrowing limits.
- Know your degree category. Graduate students in nursing, PA, PT, OT and similar programs should confirm how their program is classified to understand how this might impact your loans.
- Use ASU Online’s loan estimator. The loan estimator can help you model costs based on your credits and degree. The tool is especially useful if you're taking a less than a full-time course load.
- Visit the ASU OBBBA resource page. This is the university’s dedicated resource with program-specific guidance, comparison tables and updates as regulations are finalized.
- Reach out with questions. If you're unsure how these changes affect your situation specifically, ASU's financial aid team is here to help. Explore your full financial aid options at ASU Online.
Frequently asked questions about the One Big Beautiful Bill and student loan limits
Am I a legacy borrower under the One Big Beautiful Bill Act?
If you received a federal direct student loan disbursed before July 1, 2026, and you remain continuously enrolled in the same program at the same school, you likely qualify as a legacy borrower. Legacy status allows you to continue borrowing under current loan rules for the length of time it would take a full-time student to complete the program. Generally, this is five years for undergraduate students and two years for graduate students.
What happens to Graduate PLUS loans after July 1, 2026?
The Graduate PLUS loan program is eliminated for new borrowers starting July 1, 2026. Legacy borrowers who received a Graduate PLUS loan before that date may continue borrowing for the length of time it would take a full-time student to complete the program, which is generally two years for a graduate student. After that period, only federal unsubsidized direct loans are available, subject to the new annual and aggregate caps. Grad PLUS will be subject to proration as well.
What are the new Parent PLUS loan limits?
For new borrowers beginning July 1, 2026, Parent PLUS loans are capped at $20,000 per year per student, with a $65,000 lifetime combined limit per dependent student. If the student received federal student loans before July 1, 2026, the parent may qualify for legacy PLUS eligibility — even if the parent did not previously borrow a PLUS loan.
Does the One Big Beautiful Bill affect current ASU students?
Yes, and if you're actively enrolled at ASU and received federal direct student loans before July 1, 2026, you qualify for legacy protections for the length of time it would take a full-time student to complete the program. Generally, this is 5 years for undergraduate students and 2 years for Graduate students. Your undergraduate loan limits are unchanged. These rule changes do not affect the curriculum, faculty or quality of the online degree you earn through ASU.
Do I lose my legacy loan borrowing status if I take a break from school?
Legacy protection requires continuous enrollment in the same program at the same school. Not enrolling for a semester removes your legacy status.
What happens if I switch programs or transfer after July 1, 2026?
Switching programs or transferring to a different institution after July 1, 2026, may have you be subject to the OBBBA's new borrowing limits for your new program. You’ll need to talk with your advisors to find out the impact.
Is my nursing, physical therapy or physician assistant degree considered “professional” under the new rules?
Under the current federal framework, nursing, physician assistant, physical therapy and occupational therapy programs are not among the recognized professional degree programs — meaning students in those programs are subject to the lower $20,500 annual unsubsidized loan cap. The recognized “professional” programs include medicine, dentistry, law, pharmacy, veterinary medicine, optometry, osteopathic medicine, chiropractic, podiatry and theology. The final list is still being determined through rulemaking. Check ASU's OBBBA resource page for the latest guidance.
Does the OBBBA change my Pell Grant or scholarship?
For most students, Pell Grant eligibility is unchanged. A narrow change affecting students with a Student Aid Index above a specific threshold applies starting in 2026–27, but most Pell recipients are well below it. Also, ASU scholarships and institutional aid are not affected by the OBBBA.
Navigate your financial aid with ASU Online
Federal loan policy is changing. ASU's commitment to your access and success isn't.
ASU Online serves more than 107,000 students across 400+ programs — including many working adults, first-generation students and part-time learners who navigate financial planning alongside full lives. Our faculty and staff are dedicated to expanding access to your degree, and we'll work with you to understand these federal rules and how they may affect your specific situation.
Explore your financial aid options at ASU Online, use the loan estimator to plan by enrollment level or visit ASU's dedicated resource that’s updated regularly on how the One Big Beautiful Bill Act affects ASU students.