Federal Aid Changes

If you start a new graduate/professional program in Fall 2026 and you did not receive a Federal Direct loan (Unsubsidized or Graduate PLUS) for that program before July 1, 2026, you will be considered a new borrower under the new federal rules. See “Key Highlights” above for loan eligibility and repayment information.

The new regulations in OB3 state to be a legacy borrower, you must have borrowed loans that were made before July 1, 2026, in your current graduate or professional program of study. You will be eligible for $20,500 per year, with the aggregate limit of $100,000. This limit does include any prior Direct Unsubsidized loans you have borrowed for graduate programs. The Graduate PLUS loan will not be available.

Current regulations 34 CFR 668.2 provide a definition of professional programs and some examples of programs that qualify.

The list of professional programs are:

• 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.)
• Theology (M.Div., or M.H.L.)
• Clinical Psychology (Psy.D. or Ph.D.)

The lifetime borrowing cap will be $257,500 on all federal student loans ($200,000 for graduate and professional degrees, plus $57,500 for undergraduate degrees). In comparison, the current aggregate limit is $138,500 for most students (up to $65,500 may be subsidized). Additionally, up to $224,000 for certain health professions (up to $65,00 may be subsidized). 

No, beginning July 1, 2026, once you enroll in a graduate or professional program, you are no longer eligible to borrow federal direct loans under undergraduate limits. This extends to if you never borrowed federal loans during your undergraduate. Instead, you will have the new graduate level borrowing only: 

• Up to $100,000 for graduate programs
• Up to $200,000 for professional programs 

Note: see above for the difference between graduate and professional programs.

Private Student Loans: These are offered by private lenders, banks, and credit unions. The terms can vary depending on the lender and normally require a credit check. It is important to compare interest rates, repayment terms, and borrower protection policies offered by each lender. A list of preferred lenders that SLU works with can be found through ELMSelect. 

Yes, there are new loan limits for new borrowers. A new borrower is a parent or student borrowing a federal Direct Loan (Unsubsidized, Subsidized, Parent PLUS) on or after July 1, 2026. The new loan limits are: 

• All parents (combined) may borrow $20,000 per year per dependent student. 
• $65,000 aggregate limit per dependent student (without regard to amounts forgiven, repaid, canceled, or discharged). 

If you have borrowed any Federal Direct Student Loan before July 1, 2026, for the program you are currently enrolled in, you have legacy borrowing status up to: 

• Maximum aggregate eligibility under current loan terms and limits. 
• Three additional academic years or until your expected degree completion date (whichever comes first). 

No. If a student or parent meets the conditions for the legacy provisions under OB3, the student cannot opt out.  The student must continue to borrow under the legacy provisions unless they withdraw or cease to be enrolled in the program of study at any point after receiving the legacy provision exception.

Yes, there are new loan limits, but legacy provisions apply to previous borrowers. A previous borrower is a parent or a student with a federal Direct Loan (Unsubsidized, Subsidized, Parent PLUS) made before July 1, 2026, and during the student’s current degree. Legacy status is available for the next three academic years or until the expected graduation date, whichever comes first.  

If a Direct Loan has not been borrowed during the program of study before July 1, 2026, then the new loan limits will be followed. The new loan limits are: 

• All parents (combined) may borrow $20,000 per year per dependent student.
• $65,000 aggregate limit per dependent student (without regard to amounts forgiven, repaid, canceled, or discharged). 

No. Any amount borrowed for a graduate degree would be subtracted from the amount available for the professional degree under the new federal loan borrowing limits. You may only borrow up to $200,000 in loans for a professional degree. 

The new regulations are based on any newly started programs beginning July 1, 2026. If you are already attending SLU but start a new program such as medical school next year, you WILL NOT have access to the Graduate PLUS loan for that degree program and the new federal loan limits will apply to you. 

Yes, the legacy provisions allow you to continue borrowing under your current loan limits for three additional academic years or until your expected degree completion date (whichever comes first).

After three years, you will be subject to the new Direct Unsubsidized limits, and you will no longer be able to borrow the Grad PLUS loan. You would also have access to private loans following their own regulations. 

Private Student Loans: These are offered by private lenders, banks, and credit unions. The terms can vary depending on the lender and normally require a credit check. It is important to compare interest rates, repayment terms, and borrower protection policies offered by each lender. A list of preferred lenders that SLU works with can be found through ELMSelect. 

If you return from your leave of absence at SLU and borrow a federal loan after July 1, 2026, you will be considered a new borrower for federal Title IV aid purposes. The new, post-July 1, 2026, limits and program rules will apply.  

You will have access to the two new loan repayment plans of Standard Repayment Plan and Repayment Assistance Plan (RAP).

The new Standard Repayment Plan will assign you a loan repayment period based on how much you borrow from federal loans.

• 10-year repayment period: Less than $25,000
• 15-year repayment period: $25,000 to $49,999
• 20-year repayment period: $50,000 to $99,999
• 25-repayment period: $100,000 or more

Repayment Assistance Plan works differently compared to prior income-driven repayment plans as it looks at your most recent tax year’s adjusted gross income (AGI). The list below will give a breakdown of loan period based on borrowing amount and percentage based on AGI. 

• Repayment term of 10 years: Total outstanding principal at repayment less than $25,000
• Repayment term of 15 years: Total outstanding principal at repayment $25,000 to $49,999
• Repayment term of 20 years: Total outstanding principal at repayment $50,000 to $99,999
• Repayment term of 30 years: Total outstanding principal at repayment more than $100,000

You may remain or enroll in the current Standard, Income-Based (IBR), Graduated, or Extended repayment plans. Starting July 1,2026, you may choose to enroll in new Standard Repayment or RAP. 

Borrowers currently enrolled in ICR, PAYE, or SAVE, will be required to transition to the new Standard Repayment Plan, IBR, Graduated, Extended, or RAP by July 1, 2028. If a decision is not selected, then you will be automatically placed into RAP on July 1, 2028.

You will have access to the new Standard Repayment Plan or RAP. 

As of July 1, 2027, economic hardship and unemployment deferment will no longer be available. There will still be a forbearance option, but it is limited to 9 month increments during a 24-month (2 year) period. Federal loan servicers will still have the option to place borrowers in temporary forbearances throughout the life of the loans. A list of federal loan servicers can be found at studentaid.gov.

No changes were made to the PSLF program other than clarification that payments made while enrolled in RAP qualify for PSLF. Early versions of OB3 did have changes to PSLF, but none of these changes were in the finalized and signed version of the bill.