What you should know about the One Big Beautiful Bill Act

(See Important Disclaimer Below)

Long Island University is committed to helping students and families understand federal and other regulatory policies and protocols that affect students attending the University. Our goal is to support students and families by making informed financial decisions through clear communication, personalized financial aid counseling, and ongoing support.

The One Big Beautiful Bill Act (OBBBA) was signed into law on July 4, 2025, and includes several important changes that will take effect beginning July 1, 2026, impacting how students and families pay for higher education. These changes do not apply to the 2025–2026 award year and will apply beginning with the 2026–2027 federal financial aid award year.

Key Updates to Federal Loans

Below are key updates to federal loans effective beginning with the 2026–2027 award year (July 1, 2026).

Dependent Students

New Borrowers:

• Parents who borrow their first Parent PLUS Loan after July 1, 2026 will be considered new borrowers. These borrowers will be subject to updated Parent PLUS Loan borrowing limits.
• The combined annual borrowing limit for all parents will be $20,000 per year, per dependent student, with a $65,000 aggregate limit per dependent student.

Parent PLUS borrowers with loans disbursed before July 1, 2026:

• Current Parent PLUS Loan borrowers are those who obtained a Parent PLUS Loan before July 1, 2026 for a dependent student's current academic program, provided that the student remains in the same academic program.
• These borrowers may borrow loans up to the current annual limits for up to three (3) academic years, or the remainder of their dependent student's expected time to obtain their degree, whichever is less.

Graduate and Professional Students

New Borrowers:

• New graduate or professional borrowers who first borrow federal loans after July 1, 2026, for a graduate or professional academic program, will be considered new borrowers. These borrowers will be subject to the newly established federal loan limits and rules that apply to enrollment periods after that date.

Updated Annual and Lifetime Limits for Graduate Student Unsubsidized Loans:

• Combined annual borrowing limit will be $20,500 per year, with a $100,000 lifetime borrowing limit (excluding undergraduate loans)

Updated Annual and Lifetime Limits for Professional Student Unsubsidized Loans:

• Combined annual borrowing limit will be $50,000 per year, with a $200,000 lifetime borrowing limit (excluding undergraduate loans)

Federal Graduate PLUS Loans will be phased out beginning July 1, 2026.

Graduate PLUS borrowers with loans first disbursed before July 1, 2026:

• Current graduate or professional borrowers include those who borrowed federal loans, including Direct Unsubsidized or Graduate PLUS loans, for a term that began before July 1, 2026, and remains enrolled in the same graduate or professional program at the same institution.
• Under the legacy provision, borrowers may continue to borrow under the program for up to three academic years or for the remainder of their expected time to credential, whichever is less.

Updated Lifetime Limits for All Federal Loan Programs:

• $257,500 lifetime borrowing limit on all federal student loans (excluding any loan amounts for Federal Parent PLUS Loans, Graduate PLUS Loans, Consolidation Loans, Health Education Assistance Loans (HEAL) and Health Professions Student Loans).

Professional Degree Program and Federal Loan Eligibility

Students enrolled in eligible professional programs may qualify for the higher federal Direct Loan limits available to professional students.

Currently recognized professional programs:

• College of Pharmacy (PharmD)
• College of Veterinary Medicine (DVM)
• Clinical Psychology (PsyD)

Under current federal guidance, LIU is also treating the following programs as professional programs:

• Occupational Therapy
• Physical Therapy
• Physician Assistant
• Speech-Language Pathology
• Advanced Nursing Programs

These program classifications are based on current federal guidance and are subject to change. LIU will notify affected students if future federal guidance requires adjustments.

Legacy Borrowers and the Interim Exception

• The One Big Beautiful Bill Act includes an interim exception for certain students and parents who borrowed federal Direct Loans before July 1, 2026. These borrowers are commonly referred to as Legacy Borrowers.
• Eligible borrowers may continue borrowing under the federal loan rules in effect before July 1, 2026, for up to three academic years or the remainder of their expected time to credential, whichever is less.

Expected Time to Credential (ETTC) applies only to eligible legacy borrowers. ETTC is the remaining time needed to complete the student's current academic program based on the program's published length. Transfer credits accepted toward the student's program are included when determining the remaining time to credential.

• Once a legacy borrower reaches the end of their ETTC (or three academic years, whichever occurs first), they may remain eligible for federal student loans, but any additional borrowing will be subject to the loan limits established under the One Big Beautiful Bill Act.

LIU determines eligibility using federal requirements and information provided by the U.S. Department of Education.

Loan Reduction and Proration:

• Annual federal loan limits represent maximum eligibility amounts. Actual loan eligibility may be reduced based on federal proration rules, including enrollment level, program length, or remaining periods of study.
• The U.S. Department of Education is expected to issue additional guidance on how loan proration will apply under the One Big Beautiful Bill Act.

Next Steps for LIU Students

• Complete the Free Application for Federal Student Aid (FAFSA)
• Review your LIU financial aid offer letter
• Continue to visit our website for updates and monitor your MyLIU email for important communications.

IMPORTANT DISCLAIMER:

The information on this page is provided by Long Island University to help students, families, and the broader community understand and prepare for changes to the federal student loan and financial aid landscape.

This content reflects LIU's good-faith understanding of the One Big Beautiful Bill Act based on information currently available and does not constitute official federal guidance. For authoritative guidance and final regulatory interpretation, students and families should consult official U.S. Department of Education and other federal government sources.

For additional guidance, please refer to One Big Beautiful Bill Act Web Center administered by the National Association of Student Financial Aid Administrators (NASFAA).