By Michael Bilfinger, Assistant Director of Public Policy, AACRAO, Live from #SEM2025
The 35th Annual AACRAO Conference on Strategic Enrollment Management was recently held in Las Vegas. In addition to the smoke of the casino floors and the neon lights of the strip, there was something else overshadowing the event: the Trump administration’s efforts to remake the nation’s higher education system.
This was particularly clear in the session, “A Brave New World: A Complete Overhaul to the Federal Financial Aid System” led by Melanie Gottlieb, AACRAO Executive Director, and Jill DesJean, Director of Policy Analysis at the National Association of Student Financial Aid Administrators. The session focused on the significant changes to the financial aid process brought about by the "One Big, Beautiful Bill," signed into law earlier this year, and on how this legislation will impact institutions and the students they serve.
Graduate and Parent PLUS Loans:
OBBB eliminates the Graduate PLUS loan program effective July 1, 2026. However, borrowers with a federal direct loan made before that date while enrolled in a credentialed program can still borrow GradPLUS loans for three academic years or the remainder of their expected time to credential, whichever is less.
Conversely, Parent PLUS loans still exist, but with new borrowing limits. Starting July 1, 2026, parents may only borrow up to $20,000 per year per dependent student with a lifetime limit of $65,000 per dependent student.
During the session, DesJean was quick to note that this new lifetime limit is not enough to afford four years of college, and many students take longer than that to earn their credential. Similar to GradPLUS loans, there is a legacy provision for ParentPLUS that allows borrowers who have a federal direct loan made before July 1, 2026, while the dependent student is enrolled in a credentialed program to borrow under current loan limits for three academic years or the remainder of their expected time to credential, whichever is less.
New Federal Loan Limits:
Beyond the new loan limits for the ParentPLUS program, DesJean also covered OBBB’s new loan limits for graduate and professional students that will start July 1, 2026. Graduate students can borrow $20,500 per year with a lifetime limit of $100,000, and professional students can borrow $50,000 per year with a lifetime limit of $200,000, not including any loan amounts borrowed as an undergraduate.
These new limits carry the same legacy provision as the PLUS programs, which allows particular students to borrow under current limits for three academic years or for the remainder of their time to credential, whichever comes first. In addition to the graduate and professional loan limits, OBBB implemented a lifetime borrowing limit of $257,000 for all federal student loans, excluding any amounts borrowed under the Parent PLUS program.
Given that professional programs carry double the loan limits of graduate programs, it’s important to understand how these two terms were defined.
In 34 CFR 668.2(b), the Department of Education defines a professional degree as
“a degree that signifies both completion of the academic requirements for beginning practice in a given profession and a level of professional skill beyond that normally required for a bachelor's degree. Professional licensure is also generally required. Examples of a professional degree include but are not limited to Pharmacy (Pharm.D.), Dentistry (D.D.S. or D.M.D.), Veterinary Medicine (D.V.M.), Chiropractic (D.C. or D.C.M.), Law (L.L.B. or J.D.), Medicine (M.D.), Optometry (O.D.), Osteopathic Medicine (D.O.), Podiatry (D.P.M., D.P., or Pod.D.), and Theology (M.Div., or M.H.L.).”
Student Loan Repayment Options:
Regarding OBBB’s dramatic changes to the available options for student loan repayment, DesJean explained that all of the existing plans are being sunset by July 1, 2028, or sooner, depending on the specific plan, and will be replaced by just two new plans, which will start July 1, 2026, for all new borrowers entering repayment after that date. OBBB’s impact on existing borrowers depends on a number of factors, such as which loan repayment program they are enrolled in.
The two new options will be:
A standard plan with a fixed term ranging from 10 to 25 years, based on the amount borrowed.
A Repayment Assistance Plan with a 30-year repayment term and monthly payments ranging from 1 to 10% of a borrower’s adjusted gross income.
Unlike the now-defunct SAVE plan, which afforded some borrowers a $0 monthly payment, RAP has a minimum monthly payment of $10. However, RAP eliminates negative amortization, so borrowers will not see their principal balance increase even when making minimum payments.
Resources to Understand and Navigate OBBB Changes:
OBBB’s changes to higher education are significant, and institutions need to understand their impact to navigate this new policy environment. DesJean shared this resource from NASFAA, which breaks down the bill’s changes to the federal financial aid system, including topics not addressed in this article, such as OBBB’s creation of a workforce Pell grant program and a new institutional accountability measure.