Student Financial Aid

One Big Beautiful Bill Act

The future of federal student aid

On July 4, 2025, President Donald Trump signed major federal legislation the One Big Beautiful Bill Act (OBBB) and the Third Budget Reconciliation Bill (OB3). These changes will impact federal financial aid eligibility and Direct Loan programs beginning July 1, 2026. 

WMU is committed to providing guidance and resources to assist you in making a financial plan to cover your educational costs.

Federal Student Aid updates for OB3. 

Undergraduate student changes:

Parent PLUS Loan:

  • Annual borrowing limit to $20,000 a year per student.
  • Lifetime aggregate limit will be $65,000 per student.
  • Direct student loan offers will be prorated for students enrolled less than full-time.

Pell Grant:

  • Students with a Student Aid Index (SAI) equal to or greater than twice the maximum Pell Grant award will no longer be eligible for the Pell Grant during that academic year.
  • Students receiving scholarships or grants that fully cover their total cost of attendance (COA) will lose their Pell Grant eligibility for that academic year.
  • The net worth of certain family farms and small businesses will be excluded from the SAI calculation.
  • Foreign income will be included in the adjusted gross income (AGI) when determining Pell grant eligibility.

Graduate/Professional student changes:

  • The Graduate PLUS loan will no longer be available to new borrowers starting July 1, 2026.
  • Direct Unsubsidized Loan limits for graduate students: $20,500 annually, $100,000 aggregate
  • Direct Unsubsidized Loan limits for professional students: $50,000 annually, $200,000 aggregate
    • The maximum lifetime aggregate per student borrower will be $257,500.
  • Borrowers with loans for programs already started before June 30, 2026, may continue under prior loan limits for up to three years.

Loan changes:

  • A loan reduction on direct student loan offers will occur for students who are enrolled less than full-time.

Loan repayment changes:

  • New borrowers after July 1, 2026, may choose a fixed-term repayment plan.
    • Limited Repayment Plans:
      • A simplified Repayment Assistance Plan (RAP) will offer a minimum monthly payment of $10.
      • Standard Repayment remains.
  • Borrowers with loans disbursed before June 30, 2026 must select a limited repayment plan by July 1, 2028.
  • Hardship and unemployment deferments will phase out beginning in 2027.

Additional federal policy changes:

  • 529 plan funds may be used for up to $20,000 annually.
  • Asset exemptions reinstated for qualifying farms and fisheries.
  • Excise tax introduced on large private university endowments.
  • Supreme Court ruling allowed the Department of Education Reduction in Force (RIF), cutting approximately 1,400 positions and potentially affecting processing and oversight.

Borrowers who have received a loan for a program that has already started as of June 30, 2026, will be exempt from the above borrowing caps for up to three years as they complete their program.

How much can I borrow in Federal Direct Unsubsidized loans?
Your annual loan limit depends on your student status and academic program.

  • Graduate students: Up to $20,500 per academic year with a $100,000 aggregate limit.  
  • Eligible professional degree students: Up to $50,000 per academic year with a $200,000 aggregate limit (subject to current federal guidance). 

What is considered a professional degree program?
The U.S. Department of Education determines which academic programs qualify for professional student loan limits.

Due to a temporary federal court order, additional programs may currently qualify for the higher professional borrowing limits. This guidance may change based on future court decisions. 

Will WMU automatically increase my loan to $50,000?
No. Eligibility for a higher annual loan limit does not guarantee you will receive that amount. The University:

  • Reviews your eligibility,
  • Cannot exceed your Cost of Attendance (COA), and
  • May establish institutional borrowing limits. 

Should I borrow the full amount if I am eligible?
Borrow only what you need. Remember:

  • Student loans must be repaid with interest.
  • Borrowing more now may reduce what you can borrow in future years.
  • Future federal guidance or court decisions could affect borrowing limits. 

What happens if the court changes the rules later?
The current higher loan limits for some professional programs are temporary. If the court ultimately rules differently:

  • Future loan disbursements could be reduced or canceled.
  • Students may become subject to lower graduate borrowing limits.
  • Additional federal guidance will determine how previously disbursed funds are handled. 

Can I "lock in" my eligibility before the court makes a final decision?
No. Federal loan funds are disbursed throughout the academic year. Schools cannot accelerate disbursements to allow students to "lock in" eligibility before a court ruling. 

What if I already borrowed federal loans before July 1, 2026?
Students who borrowed a Direct Loan for their current program of study before July 1, 2026, and who remain continuously enrolled in the same program, may qualify under the federal legacy (grandfathering) provisions.

These students generally remain subject to the loan rules that existed before July 1, 2026, including continued eligibility for Federal Direct Graduate PLUS loans if otherwise eligible. 

Can I still receive a Graduate PLUS loan?
It depends.

  • New borrowers beginning a graduate or professional program on or after July 1, 2026 are generally not eligible for Federal Direct Graduate PLUS loans.
  • Legacy borrowers who meet federal grandfathering requirements may continue to borrow under the previous rules. 

What is a legacy borrower?
Generally, a legacy borrower is a student who:

  • Received a Direct Loan before July 1, 2026,
  • Remains continuously enrolled, and
  • Continues in the same academic program. 

Changing programs or breaking continuous enrollment may affect eligibility.

Can I borrow more than my Cost of Attendance?
No. Federal regulations prohibit schools from awarding financial aid that exceeds your Cost of Attendance (COA), even if you have remaining annual or aggregate loan eligibility.

How will I know how much I can borrow?
Student Financial Aid and Scholarships reviews:

  • Federal annual loan limits.
  • Aggregate loan limits.
  • Cost of Attendance.
  • Enrollment status.
  • Degree program.
  • Remaining eligibility.
  • Federal legacy provisions (if applicable). 

You will receive a financial aid offer showing the maximum amount you are eligible to borrow.

Where can I receive more information?
If you have questions about your eligibility or borrowing limits, contact the WMU Student Financial Aid and Scholarships. We can review your individual circumstances and explain the federal loan options available to you.