On July 4, 2025, HR 1 – Public Law No. 119–21, known as the “Big Beautiful Bill” or OBBB (One Big Beautiful Bill), was signed into law. This legislation introduces many changes to financing higher education.
Key Changes at a Glance (Effective 2026–2027):
- Graduate PLUS Loans phased out
- New loan limits for graduate/professional students
- Parent PLUS Loan limits
- New federal loan repayment plans
We are awaiting official guidance from the Department of Education; however, the Office of Student Financial Aid has provided a summary below of how this law may impact financial aid beginning in the 2026-2027 academic year. Please note that final determinations and interpretations of the law may be updated to reflect official Department of Education guidance once provided.
Student Loan Implications for the 2026-2027 Academic Year
Federal Direct Graduate PLUS Loans Will Be Phased Out
New graduate and professional students starting with the 2026-2027 year will no longer be able to borrow Federal Direct Graduate PLUS Loans beginning July 1, 2026.
Current students that enrolled in a graduate/professional program for the 2025-2026 year or before may continue to borrow Graduate PLUS Loans for up to 3 more years (2026-2027, 2027-2028, and 2028-2029), or until graduating from their current program of study*—whichever comes first. *Please note that guidance has not been provided to define a change to program of study, but at this time, OSFA believes this means students will not be eligible if they change degrees, programs, or concentrations.
New Graduate Loan Limits
Effective July 1, 2026:
| Annual (Academic Year) Limit | Aggregate (Lifetime) Limit | |
| Graduate Students | $20,500 | $100,000 |
| Professional* Students | $50,000 | $200,000 |
*University of Illinois Urbana-Champaign professional programs include the Carle Illinois College of Medicine, College of Law, and College of Veterinary Medicine. The Department of Education has not yet provided official guidance defining “professional” programs.
Parent PLUS Loan Limits
Undergraduate student loans (Subsidized and Unsubsidized) are NOT changing; however, Parent PLUS Loans offered to undergraduate students will have a new annual academic year limit of $20,000, and an aggregate (lifetime) limit of $65,000.
The above is effective July 1, 2026. Parents who borrowed in 2025-2026 or before* can continue to borrow under current limits for 3 years (2026-2027, 2027-2028, and 2028-2029) or until their student graduates—whichever comes first. *Please note that this may be dependent on the student remaining in the same major/program of study; guidance has not yet been provided to clarify.
Changes to Federal Loan Repayment
For loans disbursed after July 1, 2026, income-driven repayment plans will be replaced by a new Repayment Assistance Program (RAP). Borrowers of loans disbursed after July 1, 2026 will be able to choose RAP or a standard 10-year or 25-year repayment plan.
Borrowers of loans disbursed before July 1, 2026 will have the option to remain in existing income-driven repayment plans (IBR, PAYE, SAVE) but must enroll by June 30, 2028. They will be moved to RAP if they miss this deadline.
Please note that OSFA generally recommends that borrowers contact their loan servicer(s) or review information available from the Department of Education concerning federal loan repayment.
Updated Information
The Office of Student Financial Aid (OSFA) and the University of Illinois are tracking changes and will update this website as more or new information or official guidance from the Department of Education becomes available. We appreciate your patience as we navigate these changes and share what we learn with our students!
Last updated: October 27, 2025