Changes to Federal Student Financial Aid
The One Big Beautiful Bill Act (OBBBA) included several changes that affect federal student financial aid beginning with the 2026-27 academic year. A summary of these changes organized by category is provided below. The information referenced below reflects material released during the negotiated rulemaking process. Please note that final rules have not yet been issued.
Students who have previously borrowed a Federal Direct Student Loan at NC State generally qualify for legacy federal student loan provisions and are not subject to the new requirements under the One Big Beautiful Bill Act unless they take an action that results in the loss of legacy status. A list of actions that may cause a loss of legacy status is provided at the bottom of this page.
Undergraduate Students
- Pell Grant Eligibility for Students with Full Scholarships
- Students whose scholarships cover the full cost of attendance are not eligible to receive a Federal Pell Grant during the same academic year.
- Loan Proration for Less Than Full Time Enrollment
- If you enroll in less than full time credits, the total amount of federal student loan funds you may borrow for the year will be reduced. Your loan eligibility may be adjusted during the academic year if you change your enrollment, including dropping courses after census (resulting in a “W” grade) or fully withdrawing from a term within the academic year.
Parents of Undergraduate Students
- Annual Parent PLUS Loan Limit Reduced
- Annual loan limits refer to the maximum amount a parent may borrow during a single academic year. Parents of undergraduate students who are considered new borrowers may borrow up to $20,000 per academic year, or the student’s total cost of attendance minus other financial aid, whichever is lower. Parents who qualify for legacy status may continue to use the previously approved annual loan limits for up to three years or until program completion, whichever occurs first, provided they maintain legacy status. Legacy borrowers are eligible to borrow up to the total cost of attendance less other financial aid.
- Aggregate Parent PLUS Loan Limits Reduced
- Aggregate loan limits refer to the total amount a parent may borrow for an individual student over time through the Parent PLUS Loan program. Parents that are new PLUS Loan borrowers may borrow up to $65,000 in total per student from the Federal Parent PLUS Loan program. This is a reduction from previously approved aggregate limits and includes any PLUS loans that were repaid, forgiven, or otherwise discharged. There is no aggregate borrowing limit for Parent PLUS Loans for students qualifying for legacy status.
Graduate Students
- Graduate PLUS Loan Program Eliminated
- Students who are considered new borrowers will no longer be able to borrow through the Graduate PLUS Loan Program. Students who qualify for legacy status may continue to use Graduate PLUS loans as long as they maintain legacy status and remain enrolled in their academic program. For more information on the legacy provisions, please see the Legacy Status Requirements section below.
- Aggregate Unsubsidized Loan Limits Reduced
- Aggregate loan limits refer to the total amount you can borrow over time through a specific federal loan program. New borrowers may borrow up to $100,000 in total from the Federal Direct Unsubsidized Loan program. This limit does not include any federal loans borrowed while enrolled as an undergraduate student. Students who qualify for legacy status may borrow up to $138,500 in total from the Federal Direct Unsubsidized Loan program if they maintain legacy status. This includes federal unsubsidized loans borrowed while enrolled as an undergraduate student.
- Loan Proration for Less Than Full Time Enrollment
- If you enroll in less than full time credits, the total amount of federal student loan funds you may borrow for the year will be reduced. Your loan eligibility may be adjusted during the academic year if you change your enrollment, including dropping courses after census (resulting in a “W” grade) or fully withdrawing from a term within the academic year.
Professional Students (Doctor of Veterinary Medicine Students)
- Graduate PLUS Loan Program Eliminated
- Students who are considered new borrowers will no longer be able to borrow through the Graduate PLUS Loan Program. Students who qualify for legacy status may continue to use Graduate PLUS loans as long as they maintain legacy status and remain enrolled in their academic program, for up to three years or until program completion, whichever occurs first.
- Annual Unsubsidized Loan Limit Increased
- Annual loan limits refer to the total amount you can borrow in a federal student loan program during a single academic year. New borrowers may borrow up to $50,000 per academic year or the total cost of attendance, whichever is lower. Students who qualify for legacy status will continue to follow the previously approved annual loan limits for up to three years or until program completion, whichever occurs first, provided they maintain legacy status. Legacy borrowers are eligible to borrow up to $40,500 per academic year or the total cost of attendance, whichever is lower.
- Aggregate Unsubsidized Loan Limits Reduced
- Aggregate loan limits refer to the total amount you can borrow over time through a specific federal loan program. New borrowers may borrow up to $200,000 in total from the Federal Direct Unsubsidized Loan program. This limit does not include any federal loans borrowed while enrolled as an undergraduate student. Students who qualify for legacy status may borrow up to $138,500 in total from the Federal Direct Unsubsidized Loan program if they maintain legacy status. This includes federal unsubsidized loans borrowed while enrolled as an undergraduate student.
- Loan Proration for Less Than Full Time Enrollment
- If you enroll in less than full time credits, the total amount of federal student loan funds you may borrow for the year will be reduced. Your loan eligibility may be adjusted during the academic year if you change your enrollment, including dropping courses after census (resulting in a “W” grade) or fully withdrawing from a term within the academic year.
Legacy Status Requirements
In certain circumstances, the new federal loan requirements under the One Big Beautiful Bill Act do not apply. Students in these situations qualify for legacy status, which allows them to continue under the previously approved federal loan requirements. Legacy status applies for the duration of the expected time to earn your credential, for up to a maximum of three years, whichever is less, provided you continue to meet eligibility requirements.
Legacy status is automatically granted to students who meet the following criteria:
- You are enrolled in a program at NC State and received a Federal Direct Student Loan for that same program before July 1, 2026.
- If you meet the above, and are an undergraduate student, you must maintain continuous enrollment in the same NC State degree type to retain legacy status.
- If you meet the above, and are a graduate or professional student, you must maintain continuous enrollment in the same NC State degree type and academic program to retain legacy status.
Expected time to earn your credential is equal to the lesser of:
- The difference in the original length of your program minus the portion of the program you have already completed; or
- Three academic years
Annual, Aggregate, and Lifetime Borrowing Limits
- Annual loan limits apply to the amount of federal loan funds a student or parent could receive in an individual academic year. Aggregate loan limits are the total limit of loan funds a student or parent can borrow for the duration of their programs of study and could vary based on loan forgiveness, cancellation, or repayment. Below is a chart describing the current annual and aggregate loan limits compared to the changes to those limits in the One Big Beautiful Bill Act (OBBBA).
| Borrower Type | Legacy Annual Loan Limit | Annual Loan Limit under OBBBA | Legacy Aggregate Loan Limit | Aggregate Loan Limit under OBBBA |
|---|---|---|---|---|
| Dependent Undergraduate | $5,500-$7,500 | $5,500-$7,500 | $31,000 | $31,000 |
| Independent Undergraduate | $9,500-$12,500 | $9,500-$12,500 | $57,500 | $57,500 |
| Graduate | $20,500 | $20,500 | $138,500 | $100,000 |
| Professional (DVM) | $40,500 | $50,000 | $224,000 | $200,000 |
| Lifetime Limit (All Levels Except PLUS) | – | – | – | $257,500* |
| Parent Borrower (PLUS) | Up to Cost of Attendance | $20,000 | No Limit | $65,000* |
- Lifetime borrowing limits refer to the total amount you can borrow through all federal student loan programs over your lifetime. New borrowers are subject to a lifetime limit of $257,500 on total federal student loans (excluding Parent PLUS). Students who qualify as legacy borrowers are not subject to a lifetime borrowing limit.
Loan Repayment Options / Deferment and Forbearance
The One Big Beautiful Bill Act replaces several existing federal student loan repayment plans, including SAVE, PAYE, Income-Based Repayment (IBR), and Income-Contingent Repayment (ICR), with two new repayment options: the New Standard Plan and the Repayment Assistance Plan (RAP).
Students with federal loans issued before July 1, 2026, may continue using the previous repayment plans for a limited time, but will be required to transition to one of the new repayment options by 2028.
In addition, the One Big Beautiful Bill Act eliminates deferments based on economic hardship and unemployment and places new limits on the length of time a loan may be in forbearance. Borrowers may rehabilitate a defaulted federal student loan up to two times.
Available Resources