Important Federal Student Loan Changes Effective July 1, 2026
The One Big Beautiful Bill Act (OBBBA) was signed into law on July 4, 2025, and includes significant changes to the federal student loan programs, most of which become effective on July 1, 2026. We are detailing the most relevant changes below. Please note that we are awaiting more guidance from the U.S. Department of Education (ED) regarding some of these changes, and we will keep this web page up-to-date as new information is provided.
Legacy Provision
As of July 1, 2026, the Federal Direct Graduate PLUS Loan program is eliminated, and the Federal Direct Parent PLUS Loan program will be subject to annual and aggregate borrowing limits. However, there is a legacy provision in place for past federal student borrowers.
How do I determine if I am eligible for the legacy provision?
Requirements for the legacy provision:
- Must have been actively enrolled at Liberty University prior to July 1, 2026. This means a student would have needed to be enrolled in Spring 2026 or Summer 2026, and that the last semester of enrollment can not have been a total withdrawal.
- Must be in the same program of study today as they were on July 1, 2026. For Parent PLUS eligibility, this means staying within the same credential (program) level. For Graduate PLUS eligibility, this means staying in a program within the same 4-digit CIP code. (more details below)
- Must have had a federal educational loan (any type) disbursed prior to July 1, 2026, for the 2025-2026 aid year, for the same program they are still actively enrolled in (see #1).
Legacy Provision Rule
Graduate PLUS
If a student-borrower had a Federal Direct Loan disburse before July 1, 2026, and remains enrolled in the same program of study that they were enrolled in as of July 1, 2026, the student-borrower can continue to borrow Graduate PLUS Loans from the program (up to their cost of attendance) for 3 academic years or the remainder of their expected time to credential (complete their program), whichever is less.
Parent PLUS
If the dependent student had a Federal Direct Loan disburse before July 1, 2026, while he or she is enrolled in a program of study OR if the parent-borrower had a Parent PLUS Loan disburse before July 1, 2026, while their dependent students is enrolled in a program of study, the parent-borrower can continue to borrow under current loan limits (up to their dependent student’s cost of attendance) for 3 academic years or the remainder of their dependent student’s expected time to credential (complete their program), whichever is less.
What if I am not eligible for the legacy status?
If you are a non-legacy student or a student who loses their Graduate PLUS Loan legacy status, you cannot borrow Graduate PLUS Loans after July 1, 2026. If a dependent student is considered non-legacy or loses their Parent PLUS Loan legacy status, their parent-borrower will be restricted to the new annual and aggregate limits on Parent PLUS Loan borrowing as of July 1, 2026.
- The parent borrower can borrow up to $20,000 per academic year, per student
- A student will have an aggregate limit of $65,000 in PLUS loans borrowed on their behalf.
Can you lose your legacy status?
Yes – there are 3 ways in which a student can lose their legacy status:
1. Change in Program of Study
- For Parent PLUS, loss of legacy occurs when the student changes their program type. Example: a student enrolled in a bachelor’s degree program changes to an associate’s degree or certificate program – this would result in the student losing their legacy provision.
- Changing a major/minor within the same program type will not cause loss of the Parent PLUS Loan legacy provision. Example: switching from a bachelor’s degree in business to a bachelor’s degree in education.
- For a Graduate PLUS loan, loss of legacy occurs when the student switches to a program outside of their current program’s four-digit Classification of Instructional Programs (CIP) code. CIP codes are used by the U.S. Department of Education to identify and standardize academic programs
2. Failing to Maintain Continuous Enrollment
- A student must be enrolled every fall and spring semester in each academic year. The summer semester is considered optional.
3. Completing a Total Withdrawal
- Please review the Withdrawals webpage and our Financial Aid Withdrawal Policy for examples of a total withdrawal from a semester.
Loan Schedule of Reduction (Proration)
Not Attending a Full Academic Year
Under the OBBBA, students who do not attend Liberty University for the entire academic year (Fall and Spring) may have their maximum annual loan limit reduced. This means students who attend only 1 semester within the academic year are only allowed to receive up to 50% of their annual loan amount for that semester.
Example 1: A Graduate student who is only attending the Spring semester, will only be eligible for up to $10,250 in unsubsidized loans as long as it fits within their Cost of Attendance. In addition, as indicated in the Enrollment Intensity information below, the student will only be able to receive the full $10,250 if the student attends the Spring semester full-time, or 9 credit hours at the Graduate level.
Example 2: A Freshmen Independent Undergraduate student who is only attending the Spring semester, will only be eligible for up to $4,750 in federal loans (of which $1,750 can be subsidized loans if the student is eligible). Again, as indicated in the Enrollment Intensity information below, the student will only be able to receive the full $4,750 if the student attends the Spring semester full-time, or 12 credit hours at the Undergraduate level.
Enrollment Intensity
The OBBBA also includes a provision for reduction all federal student loan amounts based on enrollment, meaning the Financial Aid Office will be required to reduce loan amounts for students who enroll less than full-time. Before this change, students only needed to be enrolled at least half-time to receive their loan disbursement.
Examples: Half‑Time Enrollment – Fall and Spring
Scenario: A freshman, independent undergraduate student is enrolled half‑time (6 credit hours) in both the Fall and Spring semesters.
Fall Semester (6 credit hours)
$4,750 × (6 hours enrolled ÷ 12 hours for full time status) = $2,375
Up to $1,375 of the $2,375 may be subsidized, if eligible
Spring Semester (6 credit hours)
$4,750 × (6 hours enrolled ÷ 12 hours for full time status) = $2,375
Up to $1,375 of the $2,375 may be subsidized, if eligible
Total Loan Amount for the Academic Year
$2,375 (Fall) + $2,375 (Spring) = $4,750 total
Up to $2,750 may be subsidized, if eligible
Scenario: A graduate student is enrolled half‑time (6 credit hours) in both the Fall and Spring semesters.
Fall Semester (6 credit hours)
$10,250 × (6 hours enrolled ÷ 9 hours for full-time status) = $6,868
Spring Semester (6 credit hours)
$10,250 × (6 hours enrolled ÷ 9 hours for full-time status) = $6,867
Total Loan Amount for the Academic Year
$6,868 (Fall) + $6,867 (Spring) = $13,735 total
Scenario: A doctoral student is enrolled half‑time (3 credit hours) in both the Fall and Spring semesters.
Fall Semester (6 credit hours)
$10,250 × (3 hours enrolled ÷ 6 hours for full-time status) = $5,125
Spring Semester (6 credit hours)
$10,250 × (3 hours enrolled ÷ 6 hours for full-time status) = $5,125
Total Loan Amount for the Academic Year
$5,125 (Fall) + $5,125 (Spring) = $10,250 total
We are awaiting final guidance from ED on this provision and will continue to update this section as we receive it.
Federal Direct Unsubsidized Student Loan Program
Aggregate Loan Limits: Non-legacy Students
Limits on federal student loans first disbursed on or after July 1, 2026:
Note: The new limits below for Graduate, Doctoral, and Professional students only apply to new student loan borrowers on or after July 1, 2026. Students who have borrowed prior to this date will be held to the limits that were in place prior to July 1.
| Student Type | Subsidized Loan Maximum (UG only) | Unsubsidized Loan Maximum | Overall Maximum |
|---|---|---|---|
| Undergraduate dependent students | $23,000 | $31,000 | $31,000 |
| Undergraduate independent students | $23,000 | $57,500 | $57,500 |
| Graduate /Doctoral students (Non-Professional) | N/A | $100,000 | $157,500 |
| Professional Students* | N/A | $200,000 | $257,500 |
| All Students** | N/A | N/A | $257,500 |
*Professional Student programs include: College of Osteopathic Medicine (D.O), School of Law (J.D.), Master of Divinity (M.Div.), and Doctor of Psychology (Psy.D.) Please note that the J.D., M.Div. and Psy.D only apply as professional programs for new students, beginning with the 2026-27 academic year.
** All students outside of the legacy provision will have an overall lifetime federal student loan borrowing limit of $257,500. This includes all federal student loans combined except Federal Direct Parent PLUS loans, which are not borrowed by the student.
Aggregate Loan Limits: Legacy students
| Student Type | Subsidized Loan Maximum (UG only) | Unsubsidized Loan Maximum | Overall Maximum |
|---|---|---|---|
| Undergraduate dependent students | $23,000 | $31,000 | $31,000 |
| Undergraduate independent students | $23,000 | $57,500 | $57,500 |
| Graduate /Doctoral students (Non-Professional) | N/A | $138,500 | $138,500 (including any sub/unsub loans borrowed at the UG level) |
| Liberty University College of Osteopathic Medicine (LUCOM) students | N/A | $224,000 | $224,000 (including any sub/unsub loans borrowed at the UG level) |
Annual Loan Limits: Non-legacy Students
Annual borrower limits for federal loans based on grade level and dependency status (U.S. Department of Education)
Limits on federal student loans first disbursed on or after July 1, 2026:
Note: The new limit below for Professional students only applies to non-legacy student loan borrowers on or after July 1, 2026. Professional students who have borrowed before this date will be held to the limit that was in place prior to July 1.
| Student Type | Base (Max Subsidized Loan) | Additional Unsubsidized Loan |
|---|---|---|
| Dependent Freshman |
$3,500 | $2,000 |
| Dependent Sophomore |
$4,500 | $2,000 |
| Dependent Junior/Senior |
$5,500 | $2,000 |
| Independent Freshman and Dependent Freshman w/ Parent PLUS Denial | $3,500 | $6,000 |
| Independent Sophomore and Dependent Sophomore w/ Parent PLUS Denial | $4,500 | $6,000 |
| Independent Junior/Senior and Dependent Junior/Senior w/ Parent PLUS Denial | $5,500 | $7,000 |
| Graduate/Doctoral Students (Non-Professional) | $0 | $20,500 |
| Professional Students* | $0 | $50,000 |
*Professional Student programs include: College of Osteopathic Medicine (D.O), School of Law (J.D.), Master of Divinity (M.Div.), and Doctor of Psychology (Psy.D.) Please note that the J.D., M.Div. and Psy.D only apply as professional programs for new students, beginning with the 2026-27 academic year.
Annual Loan Limits: Legacy students
Students under the legacy provision will continue qualify for the below limits:
| Student Type | Base (Max Subsidized Loan) | Additional Unsubsidized Loan |
|---|---|---|
| Dependent Freshman |
$3,500 | $2,000 |
| Dependent Sophomore |
$4,500 | $2,000 |
| Dependent Junior/Senior |
$5,500 | $2,000 |
| Independent Freshman and Dependent Freshman w/ Parent PLUS Denial | $3,500 | $6,000 |
| Independent Sophomore and Dependent Sophomore w/ Parent PLUS Denial | $4,500 | $6,000 |
| Independent Junior/Senior and Dependent Junior/Senior w/ Parent PLUS Denial | $5,500 | $7,000 |
| Graduate/Doctoral/Law Students | $0 | $20,500 |
| Liberty University College of Osteopathic Medicine (LUCOM) students | $0 | $47,167 |