One Big Beautiful Bill Act financial aid impacts
Northern Arizona University is committed to providing our students with clear answers to changes in federal policy.
Background
In 2025, the U.S. Department of Education’s RISE negotiated rulemaking committee reached consensus on the One Big Beautiful Bill Act student loan provisions, with final regulatory text expected in early 2026.
What it means
New One Big Beautiful Bill Act rules include changes to student loans that are funded by the federal government. These changes are expected to go into effect on July 1, 2026, and thus, impact students who newly enroll at NAU for fall 2026.
The One Big Beautiful Bill Act introduced the following changes to federal student loans:
- Students enrolled before July 1, 2026, with a loan disbursed for that program may qualify for legacy (grandfathered) borrowing rules for up to three academic years or until normal program completion.
- Graduate PLUS loans will be eliminated for new borrowers beginning July 1, 2026.
- New annual and lifetime borrowing caps will apply to undergraduate, graduate and Parent PLUS loans as well as aggregate loan limits for programs classified as professional.
Changes versus legacy rules
The updates to federal financial aid rules do not apply to everyone in the same way. Students who already received federal loans before July 1, 2026, may continue some policies under legacy rules, while students borrowing for the first time after that date will follow the new provisions under the One Big Beautiful Bill Act. Use the information below to understand which rules apply to you.
Changes for all students
| Policy | Change |
|---|---|
| Less than full-time loan limits | A student’s loan amount is based on the number of credits they take each semester. For example, students enrolled at least half time (6 credits for undergraduates or 5 credits for graduate students) will have their loan eligibility adjusted. A half-time course load typically results in receiving about half of the full loan amount. |
Students with federal student loans before July 1, 2026
| Policy | Legacy provision |
|---|---|
| All students | |
| Aggregate borrowing limits | Students under legacy rules follow existing federal loan limits, which in many cases allow higher totals (including unlimited Parent and Graduate PLUS). |
| Repayment plans available | Legacy borrowers may remain on or switch among the existing repayment plans (SAVE, REPAYE, PAYE, IBR, ICR) until June 30, 2028. After that, they must choose: - Repayment Assistance Plan (RAP) - Income-based Repayment (for eligible borrowers) |
| Undergraduate students | |
| Parent PLUS Loans | If a student had a federal student loan before July 1, 2026, the parent may continue to borrow up to the cost of attendance under the previous rules for up to three years, or until the student completes their program, whichever comes first. |
| Graduate students | |
| Loan program availability | Students may continue to borrow Graduate PLUS for up to three academic years or until normal program completion, whichever occurs first. |
Students borrowing federal student loans for the first time beginning July 1, 2026
| Policy | New provisions (One Big Beautiful Bill Act) |
|---|---|
| All students | |
| Aggregate borrowing limits | New lifetime caps for undergraduate, graduate and Parent PLUS borrowing. Caps may be lower than current totals. |
| Repayment plans available | Only two types for new loans: - Tiered Standard Repayment - Repayment Assistance Plan (RAP) Older income-driven repayment plans (SAVE, REPAYE, PAYE, ICR) not available for new loans. |
| Undergraduate students | All parents (combined) may borrow $20,000 per year per dependent student and a $65,000 lifetime limit per dependent student. |
| Parent PLUS Loans | All parents (combined) may borrow $20,000 per year per dependent student and a $65,000 lifetime limit per dependent student. |
| Graduate students | |
| Loan program availability | Graduate PLUS program eliminated for students starting after July 1, 2026. Unsubsidized loans are available. |
| Professional degree definition | Only federally defined programs (medicine, dentistry, law, clinical psychology, etc.) qualify for “professional” unsubsidized federal loan levels. |
Frequently asked questions
General questions
How do I know which rules apply to me?
Confirm your enrollment with NAU and disbursement dates. Students can view their prior loans on LOUIE. If you have accepted and received loan funds to pay your tuition prior to July 1, 2026, the legacy provisions apply to you as long as you stay enrolled, for the next three years.
When do the One Big Beautiful Bill Act changes go into effect?
July 1, 2026.
Why are these rules changing?
The changes are the result of the One Big Beautiful Bill Act, which was passed by Congress and is scheduled to take effect on July 1, 2026.
NAU recommends responsible borrowing and always encourages students to speak with us to understand their loan options and the impact that borrowing will have on their lives after graduation.
Regardless of the forthcoming changes, NAU will continue to counsel students looking for ways to finance their education about all the options available to them.
Did the One Big Beautiful Bill Act make changes to Pell Grant eligibility?
Most Pell eligible students were not affected by the One Big Beautiful Bill Act. To see the changes that do go into effect on July 1, 2026, visit the Federal Pell Grant page.
What is NAU doing about these changes?
NAU is closely monitoring these rule changes and is committed to keeping current and prospective students informed. These proposed rule changes do not impact our curriculum, nor do they reflect the quality of the degree you earn while attending NAU.
Our faculty and staff are dedicated to expanding access to our degree programs. We are working to help you confidently pursue your degree and will work with you to understand these federal rules and how they may impact borrowing limits and loan types.
Loan questions
I am a current student at NAU. Will my federal loans change?
If you are currently enrolled at NAU and received federal student loans, you qualify for legacy provisions for up to three academic years or through expected program completion (based on the school’s official program length). This protection allows you to maintain the annual and aggregate loan limits of federal financial aid you are receiving until graduation.
If you are enrolled less than full time, your federal student loan amounts will be prorated based on your enrollment status.
What are the changes to the Federal Loan borrowing limits?
| Annual borrowing limits | Aggregate borrowing limits | ||||
| Student by borrowing year | Student population | Grad PLUS Loan | Unsubsidized Loan | Grad PLUS Loan | Unsubsidized Loan |
| Current borrowers* | Graduate and professional | Up to total cost of attendance minus any financial aid | $20,500 | No limit | $138,500; the graduate aggregate limit includes all federal loans received for undergraduate study |
| New borrowers starting July 1, 2026 | Graduate | Eliminated | $20,500 | Eliminated | $100,000 |
| Professional** | Eliminated | $50,000 | Eliminated | $200,000 | |
| *Legacy provision: If a borrower has a Grad PLUS loan made before July 1, 2026, while enrolled in a credential program, the borrower can continue to borrow from the program for 3 academic years or the remainder of their expected time to credential, whichever is less. | |||||
| **The definition of professional programs is being determined through negotiated rulemaking. Final information to be shared in spring 2026. | |||||
| ***$257,500 lifetime borrowing limit on all federal student loans, excluding Parent PLUS and Graduate PLUS loans. | |||||
If my parent didn't borrow PLUS before July 1, 2026, can they still borrow under legacy?
If you have received federal student loans as a borrower before July 1, 2026, you would fall under legacy provisions for PLUS loan eligibility, even if your parent did not borrow a PLUS loan prior.
Will my current repayment plan (e.g., SAVE) disappear?
You may keep or switch among current income-driven repayment plans until the federal transition window closes (July 1, 2028). After that, older plans are phased out for most borrowers, and future repayment must use Repayment Assistance Plan, Tiered Standard or Income Based Repayment (if eligible).
Graduate student questions
Which graduate degrees are impacted? What is a professional student and a professional program?
For new borrowers, all graduate degrees will be impacted by the elimination of the Graduate PLUS loan program, which previously allowed students to borrow up to the cost of attendance. However, students in professional programs are able to borrow more throughout their lifetime. A professional program is currently defined as an advanced degree that typically requires professional licensure to work in the field. These programs:
- Result in a professional degree that reflects both academic achievement and the development of professional skills beyond the bachelor’s level;
- Are generally at the doctoral level and require at least six years of postsecondary education, including at least two years of post-baccalaureate coursework;
- Generally require professional licensure to begin practicing in the field; and
- Are classified under specific program CIP codes aligned with recognized professional fields.
| Professional programs with a $200,000 loan limit | Programs with a $100,000 loan limit |
| - 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.)* | All other graduate degrees |
*program available at Northern Arizona University
What do these changes mean to me as a current graduate student?
If you’re currently enrolled in a graduate program, these changes will not affect you, so long as you remain in your current program until completion. The rules, as they currently stand, will be implemented on July 1, 2026, and will not be applied retroactively. You’ll be able to borrow up to the total cost of your degree program.
These rule changes only impact the definition of a degree and its status under financial aid guidelines and are not a reflection of the quality or rigor of degree programs at NAU.
What do these changes mean to me as a prospective graduate student?
If you're planning to enroll in a graduate program on or after July 1, 2026, you will be under the new loan rules, unsubsidized loans only and a borrowing cap based on your degree program.
These rule changes only impact the definition of a degree and its status under financial aid guidelines and are not a reflection of the quality or rigor of degree programs at NAU.
What funding options are available to me if I need to borrow more than just my unsubsidized loan?
What funding options are available to me if I need to borrow more than just my unsubsidized loan?
If you need to borrow beyond the annual unsubsidized loan limit, there are many private student loan options available. NAU provides tools on our Private Loan page to help you make well-informed decisions.
Legacy provision questions
Who counts as a legacy student?
You may be considered a legacy student if both of the following apply to you:
- You were officially enrolled in your current program by June 30, 2026
- You had at least one Direct Loan disbursement for that program before July 1, 2026
Admission or intent to enroll is not enough. At least one actual financial aid disbursement must occur.
How long does legacy protection last?
Legacy protections last for the shorter of these options:
- Three academic years
- The remaining “expected time to credential” (your program’s normal length at NAU)
Does taking a leave break legacy eligibility?
An approved leave of absence generally does not break eligibility. Withdrawing from all courses or failing to return from a leave of absence will cause you to move under the new provisions.
Staying continuously enrolled will enable you to borrow under legacy provisions. If any student is considering leaving NAU, we encourage you to reach out so that we can advise you about your decision.