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On July 4, 2025, the President of the United States signed the One Big Beautiful Bill Act (OBBBA) into law, bringing significant changes to federal programs, including federal student loans.
We understand that many Pilot families have questions about how these changes may affect paying for college. To help, we have provided a summary of the changes for undergraduate students, graduate students, and parents.
Please note: This information reflects the current understanding of the new rules and regulations for federal student financial aid. Rules may change with little notice. ÀÖ²¥´«Ã½ will update this page as new guidance is received from the U.S. Department of Education. For the most up-to-date information, visit the .
The bill includes two changes to Pell Grant eligibility requirements:
The Graduate PLUS Loan program will be discontinued and will not be available for new borrowers (anyone who has not had a federal student loan disbursed prior to July 1, 2026.
Students with a Federal Direct Loan (Unsubsidized and/or Graduate Plus) disbursed before July 1, 2026, who remain in the same program of study may continue to borrow under existing Graduate PLUS Loan rules for up to 3 more academic years or until their program ends – whichever comes first. Students must remain continuously enrolled in the same credentialed program to retain legacy borrowing eligibility. A withdrawal, a lapse in enrollment, or change in program/degree level may terminate the legacy provision.
View the Loan Limit flowchart to determine your federal loan limit category for the 2026–2027 academic year. Find it on the under Summary Charts as "Flowchart: 2026-27 & Beyond Graduate/Professional Student Loan Borrowing Limits".
Parents of new students may borrow up to $20,000 per academic year, with a $65,000 lifetime maximum per student. Parents who wish to borrow the full $20,000 annual maximum can apply directly on the . It's important to borrow wisely, taking the maximum amount each year could potentially decrease loan eligibility before the student graduates.
Parents who borrowed before July 1, 2026, may continue borrowing under existing Parent PLUS Loan rules which allows for a PLUS loan up to the Cost of Attendance for up to 3 more academic years or the student completes their program – whichever comes first. Students must remain continuously enrolled in the same credentialed program to retain legacy borrowing eligibility. A withdrawal, a lapse in enrollment, or change in program/degree level may terminate the legacy provision.
| Classification | Yearly Limit | Lifetime Limit |
| Undergraduate | No Change | No Change |
| Graduate (Unsubsidized Only) | $20,500 | $100,000 (excludes undergraduate borrowing) |
| Professional (Law, Veterinary Medicine, etc.) (Unsubsidized Only) | $50,000 | $200,000 (excludes undergraduate borrowing) |
Total Lifetime Borrowing Limits: $257,500 (includes undergraduate and graduate borrowing)
If you are enrolled less than full-time, your federal student loan eligibility may be reduced. This reduction is called loan proration. It means the total loan amount you can receive is adjusted based on the number of credit hours you take.
To calculate your prorated loan amount:
A dependent undergraduate student enrolls in:
This equals 12 total credit hours for the academic year.
Calculation:
12 ÷ 24 = 0.50 (50% enrollment intensity)
0.50 × $7,500 (senior-level annual loan limit) = $3,750
Result: The student is eligible to receive $3,750 in federal student loans for the academic year.
A graduate student enrolls in 6 credit hours in the Fall semester and 6 credit hours in the Spring semester AND 6 credit hours in the Summer semester, for a total of 18 credit hours for the academic year.
Annual loan eligibility is prorated based on enrollment intensity. In this case:
18 (credit hours) ÷ 36 = 0.50 (rounded to the nearest whole percentage)
0.50 × $20,500 = $10,250
Result: The student would be eligible to receive $10,250 in Direct Unsubsidized Loan funds for the academic year ($1,708 per session). Under prior regulations, the student could have received the full $20,500 annual loan limit, even when enrolled at this level.
A graduate student enrolls in 6 credit hours in the Fall semester and 6 credits hours in the Spring semester, for a total of 12 credit hours for the academic year.
Annual loan eligibility is prorated based on enrollment intensity. In this case:
12 (credit hours) ÷ 18 = 0.6666 (rounded to the nearest whole percentage)
0.67 × $20,500 = $13,735
Result: The student would be eligible to receive $13,735 in Direct Unsubsidized Loan funds for the academic year. Under prior regulations, the student could have received the full $20,500 annual loan limit, even when enrolled at this level.
Key takeaways to keep in mind while receiving federal loans:
The Repayment Assistance Plan (RAP) is a new Income-Based Repayment (IBR) option established through the One Big Beautiful Bill.
Key Features of the Plan
Transition from Current Repayment Plans
Current Income-Driven Repayment (IDR) plans and Standard Repayment plans will be phased out after existing borrowers transition to the new repayment structure.
The bill establishes a new Standard Repayment Plan with fixed repayment terms of 10, 15, 20, or 25 years. The repayment term is determined by the borrower’s total amount borrowed or outstanding loan balance for borrowers already in repayment.
The bill removes the requirement for borrowers to demonstrate a partial financial hardship to qualify for the Income-Based Repayment (IBR) Plan.
The legislation also:
Borrowers who receive new federal student loans on or after July 1, 2026, will have access to only two repayment plan options:
Borrowers who do not select a repayment plan will automatically be enrolled in the new Standard Repayment Plan.
Since all federal student loans must be repaid under the same repayment plan, borrowers who previously received loans before July 1, 2026, and later borrow additional loans on or after July 1, 2026, will also be limited to these two repayment options: the new Standard Repayment Plan, or RAP.
Borrowers who did not receive new federal student loans on or after July 1, 2026, may continue to enroll in the current Standard, Graduated, Extended, or current Income-Based Repayment (IBR) plans. These borrowers may also choose to enroll in the new Repayment Assistance Plan (RAP).
Current borrowers may remain in, enter, or switch between existing Income-Driven Repayment (IDR) plans through July 1, 2028.
Borrowers currently enrolled in the following repayment plans must transition to another eligible repayment option by July 1, 2028:
Borrowers who do not select a new repayment plan by July 1, 2028, will automatically be enrolled in RAP.
New Parent PLUS Loans first disbursed on or after July 1, 2026, must be repaid under the Standard Repayment Plan and are not eligible for the Repayment Assistance Plan (RAP).
Borrowers who enroll in RAP but also have loans that are not eligible for RAP, such as Parent PLUS Loans or certain consolidation loans, must repay those ineligible loans separately under an eligible repayment plan.
Consolidation loans first disbursed on or after July 1, 2026, are eligible only for:
Consolidation loans disbursed before July 1, 2026, including subsidized and unsubsidized consolidation loans, are treated like other eligible federal student loans. Borrowers currently enrolled in an Income-Driven Repayment (IDR) plan have until July 1, 2028, to select one of the following repayment options:
If a consolidation loan was used to repay a Parent PLUS Loan, the loan must enter the Income-Contingent Repayment (ICR) Plan before July 1, 2028, to become eligible for IBR.
Borrowers who do not select a repayment plan by July 1, 2028, will be automatically assigned as follows:
Borrowers may rehabilitate a defaulted federal student loan up to two times, instead of the current limit of one time.
The minimum monthly payment required to rehabilitate a Direct Loan is set at $10.
The bill eliminates the economic hardship and unemployment deferment options.
Borrowers with loans made on or before July 1, 2027, may continue to use these deferment options under current rules.
For loans made on or after July 1, 2027, borrowers may receive forbearance for up to nine months within any two-year period.
This differs from current rules, which allow for forbearance of up to 12 months at a time, with a total cumulative limit of three years.
This information reflects the most current guidance available but is subject to change. The ÀÖ²¥´«Ã½ Office of Financial Aid will continue to keep you informed as additional guidance becomes available.
You have the potential. We have the community, resources, and affordable education you need to achieve your purpose.