Federal Financial Aid Changes
Under the One Big Beautiful Bill Act (OBBBA)

Updated April 20, 2026

On July 4, 2025, the One Big Beautiful Bill Act (OBBBA) was signed into law, resulting in major changes to federal student aid programs. Some changes took effect immediately; others begin July 1, 2026 and continue to phase in through 2029–30.

This page summarizes how OBBBA affects Touro undergraduate, graduate, professional, and parent borrowers, including new loan limits and special exceptions for continuing students. We will continue to update this page as the U.S. Department of Education releases additional guidance.

This information is based on Federal Student Aid announcements and Definitions and is provided for general guidance. Individual eligibility and awards are determined by federal rules, your enrollment and loan history, your FAFSA, and Touro’s institutional policies. Students should always review their actual financial aid offer and consult with the Touro Financial Aid Office before making any borrowing decisions.

Key Definitions Under OBBBA

These terms appear throughout the updated federal rules:

• Annual Loan Limit – Maximum amount a student may borrow in a single award year.
• Aggregate Loan Limit – Maximum amount a student may borrow over their lifetime in a given category.
• Lifetime Maximum Loan Limit – New overall cap of $257,500 in Direct Loans (subsidized and unsubsidized), regardless of amounts repaid or discharged.
• Professional Degree Program – A federally defined program leading to a first‑professional credential (see Section 4 below).
• Repayment Assistance Plan (RAP) – A new income‑driven repayment plan available to many borrowers.
• Tiered Standard Plan – A new fixed‑payment plan with payments that increase in tiers over time.
• Interim Exception / Legacy Loan Limits – A temporary rule allowing certain continuing students to retain pre‑OBBBA loan limits for up to three academic years (see Section 5).

Undergraduate Borrowers

A. New Undergraduate Borrowers (All Loans First Disbursed On or After July 1, 2026)

Loan Limits

• Annual and aggregate limits remain unchanged from pre‑OBBBA rules.
• Lifetime maximum Direct Loan limit: $257,500 (includes all Direct Loans, even if repaid or discharged).
• Less‑than‑full‑time enrollment: Loan eligibility is proportional to enrollment level.
• Parent PLUS limits (new federal rule):
• Parents may borrow up to $20,000 annually per dependent undergraduate.
• Parents may borrow up to $65,000 aggregate per dependent undergraduate.
• These limits apply across all parents combined.
• After reaching the limit, parents cannot receive additional PLUS loans.

If a parent is denied PLUS due to adverse credit, the student may receive increased Direct Unsubsidized eligibility. Reaching the PLUS limit does not increase student unsubsidized eligibility.

B. Continuing Undergraduate Borrowers (Loans Before July 1, 2026 + New Loans After July 1, 2026)

Loan Limits

Some borrowers qualify for the Interim Exception (see Section 5). If you:

• Do not qualify → New OBBBA limits apply July 1, 2026.
• Do qualify → Some new limits are delayed until 2029–30, unless you take an action that cancels the exception.

Parent PLUS Borrowing

• If you qualify for the exception → Parents may borrow up to COA – other aid.
• If you do not qualify → Parents are limited to $20,000 annual / $65,000 aggregate.

Graduate Borrowers

A. New Graduate Borrowers (All Loans First Disbursed On or After July 1, 2026)

Loan Limits

• Annual unsubsidized limit: $20,500.
• Aggregate unsubsidized limit:
• $100,000 if never previously a professional student.
• $200,000 minus prior professional borrowing if previously a professional student.
• Grad PLUS is eliminated.
• Lifetime maximum: $257,500.
• Less‑than‑full‑time enrollment: Loan eligibility is proportional.

B. Continuing Graduate Borrowers (Loans Before July 1, 2026 + New Loans After July 1, 2026)

Loan Limits

Some graduate borrowers qualify for the Interim Exception:

• If you do not qualify:
• Aggregate unsubsidized limit becomes $100,000 (or $200,000 with prior professional study).
• Grad PLUS is not permitted.
• Lifetime maximum of $257,500 applies July 1, 2026.
• If you do qualify:
• You retain the $138,500 aggregate limit (including undergraduate loans) through 2028–29.
• You may continue to receive Grad PLUS through 2028–29 (if no adverse credit).
• Lifetime maximum does not apply until the exception ends.

Professional Borrowers

A. New Professional Borrowers (All Loans First Disbursed On or After July 1, 2026)

Loan Limits

• Annual unsubsidized limit: $50,000.
• Aggregate unsubsidized limit: $200,000 (minus prior graduate borrowing).
• Grad/Prof PLUS is eliminated.
• Lifetime maximum: $257,500.
• Less‑than‑full‑time enrollment: Loan eligibility is proportional.

B. Professional Programs Eligible for Higher Loan Limits

Under federal definitions, the following professional degree programs qualify for the $50,000 annual / $200,000 aggregate unsubsidized limits:

Federally Recognized Professional Programs

• Doctor of Medicine (MD)
• Doctor of Osteopathic Medicine (DO)
• Doctor of Dental Surgery (DDS)
• Doctor of Dental Medicine (DMD)
• Doctor of Veterinary Medicine (DVM)
• Doctor of Optometry (OD)
• Doctor of Pharmacy (PharmD)
• Doctor of Podiatric Medicine (DPM)
• Doctor of Chiropractic (DC)
• Juris Doctor (JD)
• Doctor of Physical Therapy (DPT) if classified as first‑professional by the institution
• Other first‑professional programs meeting federal criteria

Dual/Joint Degree Programs – Unless officially recognized by State or Accrediting bodies, programs where a student receives two degrees after completing the requirements of each degree at separate times (as opposed to receiving two degrees after the completion of all requirements of both degrees) may not be eligible for Interim Exception / Legacy Loan Limits under Section 5.

C. Continuing Professional Borrowers (Loans Before July 1, 2026 + New Loans After July 1, 2026)

Loan Limits

• If you do not qualify for the exception:
• New limits apply July 1, 2026.
• No Grad/Prof PLUS.
• Lifetime maximum of $257,500 applies.
• If you do qualify:
• You retain pre‑OBBBA limits for up to three academic years.
• Grad/Prof PLUS remains available until 2029–30 or until the exception ends.

Legacy / Interim Exception Loan Limits

OBBBA includes a temporary “Interim Exception” allowing certain continuing students to retain pre‑July 1, 2026 loan limits for up to three academic years.

DISCLAIMER: Touro will be relying on the Department of Education’s determination of whether a student meets the requirements for the Legacy/Interim Exception Loan Limits. At this point in time, this information is provided for information purposes only and may be subject to change.

A. Who Qualifies?

A borrower qualifies if, as of June 30, 2026:

1. The student is enrolled in a program of study AND
2. The student has received a Direct Loan for that same program on or before June 30, 2026.

If both are true → the student receives legacy loan limits for a limited time.

Borrowers cannot opt out of the exception.

B. Duration of Legacy Eligibility

The duration equals the lesser of:

• Three academic years, or
• Program length minus completed program time as of July 1, 2026.

This is the student’s expected time to credential.

C. Eligibility Retained For

• Continued enrollment
• Change of undergraduate major
• Dual degrees within the same program
• Approved leaves of absence
• Change in ownership or campus reaffiliation
• Non‑attendance without withdrawal

D. Eligibility Lost For

• Enrollment beyond published program length (including part‑time pacing)
• Withdrawals (even if the student later re‑enrolls)
• Transferring programs
• Changing graduate programs
• Joint degrees across different programs

Nuances Affecting Loan Eligibility, Program Classification, and the Interim Exception

The following rules clarify how enrollment status, program structure, academic changes, and borrowing history affect a student’s eligibility for federal loan limits and the Interim Exception (Legacy Loan Limits) under OBBBA.

Please note that this is provided for informational purposes only and may change. The Department of Education and not Touro remains the sole arbiter of a Student’s financial aid eligibility.

Part‑Time Enrollment

Students enrolled less than full time are still eligible for federal Direct Loans; however:

• Annual loan eligibility is reduced proportionally based on the student’s enrollment level relative to full‑time status.
• This proportional reduction applies to all borrowers, including those who qualify for the Interim Exception.
• Enrollment below half‑time generally makes a student ineligible for federal loans.

Leave of Absence (LOA)

A Leave of Absence is a temporary, approved break in a student’s academic program that meets federal requirements.

A student on an approved LOA:

• Retains eligibility for the Interim Exception during the leave.
• Must return to the same program to maintain eligibility.
• Must meet all federal LOA requirements, including:
• The LOA is formally requested and approved.
• The LOA does not exceed 180 days in a 12‑month period.
• The student is expected to return to the same point in the program.

Unapproved or extended absences may be treated as withdrawals, which cancel Interim Exception eligibility.

Dual Degree vs. Joint Degree Programs

Federal rules distinguish between dual degrees and joint degrees, and this distinction affects Interim Exception eligibility.

Joint Degree Programs

A Joint degree program typically involves:

• Two separate degree programs
• With separate admissions
• Completed sequentially or with overlapping coursework
• Resulting in two separate degrees awarded at different times

Important: Unless a Joint degree program is officially recognized as a single program by the state, the institution, or the accrediting body, it is not considered one program for purposes of the Interim Exception.

Therefore:

• Students in Joint degree programs may not be eligible for the Interim Exception if the second degree is considered a new program.

Dual Degree Programs

A dual degree program is:

• A single, integrated program
• Leading to two degrees awarded simultaneously
• With a unified curriculum approved as a single program by the institution and/or accreditor

For federal purposes:

• Dual degree students retain Interim Exception eligibility as long as the joint program is officially recognized as one program of study.

Key Rule

Unless officially recognized by the state or accrediting bodies as a single program, programs where a student receives two degrees after completing the requirements of each degree at separate times do not qualify as a single program for Interim Exception purposes.

Withdrawals

A withdrawal—whether official or unofficial—has significant consequences:

• Any withdrawal from the program for which the student received a Direct Loan ends Interim Exception eligibility, even if the student later re‑enrolls.
• Returning to the same program after a withdrawal is treated as a new enrollment, and the student becomes subject to new OBBBA loan limits.

This applies to:

• Term withdrawals
• Program withdrawals
• Administrative withdrawals
• Unapproved leaves of absence

Change of Program (COP)

Changing programs almost always affects Interim Exception eligibility.

A student loses eligibility if they:

• Transfer to a different program, even within the same school
• Change from undergraduate to graduate status
• Change from graduate to professional status
• Move between different graduate programs (e.g., MBA → MSW)

A student retains eligibility only if:

• The change is within the same program of study (e.g., changing undergraduate majors within the same bachelor’s degree program)

Exceeding Published Program Length

Interim Exception eligibility is tied to the program’s published length.

A student loses eligibility if:

• They exceed the published program length, even if enrolled part‑time
• They take longer than the catalog‑defined duration for a full‑time student
• They extend their program through repeated coursework or pacing changes

This rule applies regardless of academic standing or satisfactory academic progress.

Reaching Maximum Borrowing Limits

Borrowers may reach one of several federal limits:

• Annual Loan Limits
  • Once reached, the student cannot borrow more for that award year.
• Aggregate Loan Limits
  • Borrowers who reach their aggregate limit:

• Cannot receive additional loans until some portion is repaid, even if they qualify for the Interim Exception.

• Lifetime Maximum Loan Limit
  • OBBBA establishes a new lifetime cap of $257,500 for all Direct Loans (excluding PLUS). Once reached:

• The borrower cannot receive additional Direct Loans, regardless of program level or exception status.

Summary of Eligibility Impacts

What You Should Do Now

• Check your program: Confirm whether your program is classified as an Undergraduate, Graduate or Professional degree under these rules and the length of your Program. Program classification (undergraduate, graduate, professional) follows federal definitions and Touro’s academic structure. If you believe you are in a Dual/Joint Degree program, contact your program for clarification on your options.

• Plan ahead: If you anticipate borrowing for graduate or professional programs, review your options now, including private loans.
• Estimate borrowing needs: Consider whether you may qualify for the Interim Exception including how much time you have left in the program to determine whether the new lifetime caps would apply to your specific situation when planning multi-year financing.
• Contact Your Financial Aid Counselor
• Stay informed: Monitor official updates from the U.S. Department of Education.