The One Big Beautiful Bill Act (OBBBA), enacted in July 2025, includes significant changes to the federal student loan programs starting July 1, 2026. Some affect new borrowers right away for the 2026–2027 academic year, and others affect continuing borrowers over time.
To understand what’s changed and how you might be affected, start with the two questions below and then jump to the sections that match your situation.
Questions? Contact us at getaloan@mit.edu. A loan counselor can help you understand how these changes may affect you.
Disclaimer: The information here reflects our current understanding of federal guidance as of July 2026. We will update this page as the U.S. Department of Education releases additional guidance. For the most authoritative information, visit the Department of Education’s OBBBA updates page.
Table of Contents
- Find your status
- Undergraduate students
- Graduate students
- Overview of federal loan limit changes
- Frequently asked questions
- Additional resources
Find your status
Start with these two questions to determine your borrower and student status, then jump to your borrower section to learn how OBBBA affects you.
1. Are you a continuing borrower or a new borrower?
Note: If you do not meet all the conditions listed under “continuing borrower,” you are not eligible for the limited exception and are subject to the “new borrower” limits.
| Borrower type | You are this if… | What it means for you |
|---|---|---|
| Continuing borrower |
|
You may keep your prior borrowing options for a limited time under the limited exception.
Refer to this page for information about the limited exception and what changed. |
| New borrower |
|
The new limits and rules apply to you starting July 1, 2026.
While this page explains what changed, refer primarily to the Undergraduate loans and Graduate loans pages for the current federal loan policies that apply to you. |
Still not sure which you are? See the limited exception FAQs or contact getaloan@mit.edu.
2. Are you an undergraduate or graduate student?
| Student type (jump to…) | What it means for you |
|---|---|
| Undergraduate student → | Your Direct Loan limits are not changing. The main change for you is to Parent PLUS Loans. |
| Graduate student → | The main changes for you include new borrowing limits and the end of new Grad PLUS Loans. |
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Undergraduate students
What’s changing
- New Parent PLUS Loan limits. New parent borrowers are capped at $20,000 per student per year and $65,000 per student total. Continuing parent borrowers may keep prior limits under the limited exception.
- Loan proration for part-time enrollment. Proration of Direct Subsidized and Unsubsidized Loans applies to both new and continuing borrowers who enroll less-than full time, with no limited exceptions.
- New repayment plans. This applies to both new and continuing borrowers who take out a new loan after July 1, 2026.
What’s staying the same
- Financial aid disbursed for the 2025–2026 academic year.
- Direct Subsidized and Direct Unsubsidized Loan limits for undergraduate borrowers, though any new Direct Loans (excluding Parent PLUS) will contribute to the new combined lifetime maximum limit of $257,500.
- Non-federal loans such as private loans or the MIT Technology Loan. Scholarships and grants are also not impacted.
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Graduate students
Note on graduate vs. professional programs: Under OBBBA, “graduate” programs and “professional” programs are separated by specific degree types and have separate loan limits. MIT does not offer programs that meet the federal definition of “professional” — if you are pursuing a graduate degree at MIT, you are subject to “graduate” loan limits. If you have questions about how your program is classified, contact getaloan@mit.edu.
What’s changing
- End of Grad PLUS Loans. The program is closed to new borrowers. Continuing borrowers may keep borrowing under the limited exception.
- New Direct Unsubsidized Loan aggregate limits. New graduate borrowers are capped at $100,000 total, excluding undergraduate borrowing. Any Direct Loans (excluding Parent PLUS) will contribute to the new combined lifetime maximum limit of $257,500. Continuing borrowers may keep prior limits under the limited exception.
- Loan proration for part-time enrollment. Proration of Direct Unsubsidized Loans applies to both new and continuing borrowers who enroll less-than full time, with no limited exceptions.
- New repayment plans. This applies to both new and continuing borrowers who take out a new loan after July 1, 2026.
What’s staying the same
- Financial aid disbursed for the 2025–2026 academic year.
- Direct Unsubsidized Loan annual limits for graduate borrowers.
- Non-federal loans such as private loans. Scholarships, grants, fellowships, and department funding are also not impacted.
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Federal loan limit changes
The table below shows annual loan limits01 The <strong>annual loan limit</strong> is the maximum amount of federal loans that you may borrow in a single academic year (up to cost of attendance minus other financial aid received). The cap resets every year up to aggregate limits. and aggregate loan limits02 The <strong>aggregate loan limit</strong> is the total outstanding principal balance you can owe at any given time. If you pay down your existing federal loans, the remaining available borrowing limit opens back up. for continuing borrowers under the limited exception and new borrowers, by student type.
Note on new lifetime maximum loan limit: New borrowers are capped at a $257,500 lifetime total across all federal student loans (undergraduate and graduate combined), excluding Parent PLUS Loans. Once you reach the lifetime maximum limit, you are no longer eligible for any federal loans, even if you paid the prior loans in full or in part. Continuing borrowers may keep no limit under the limited exception.
| Student type | Loan type | Continuing borrower limit | New borrower limit |
|---|---|---|---|
| Undergraduate (dependent) | Direct Subsidized & Unsubsidized | First year: $5,500 ($3,500 cap on Subsidized)
Sophomore year: $6,500 ($4,500 cap on Subsidized) Junior and senior years: $7,500 ($5,500 cap on Subsidized) Aggregate: $31,000 ($23,000 cap on Subsidized) |
No change |
| Undergraduate (independent)03 And dependent students, if your parent is unable to obtain a Direct PLUS Loan due to adverse credit. | Direct Subsidized & Unsubsidized | First year: $9,500 ($3,500 cap on Subsidized)
Sophomore year: $10,500 ($4,500 cap on Subsidized) Junior and senior years: $12,500 ($5,500 cap on Subsidized) Aggregate: $57,500 ($23,000 cap on Subsidized) |
No change |
| Undergraduate (dependent) | Direct Parent PLUS | Annual: Cost of attendance minus other aid
Aggregate: No limit |
Annual: $20,000 per student
Aggregate: $65,000 per student |
| Graduate | Direct Unsubsidized | Annual: $20,500
Aggregate: $138,500 (includes undergraduate borrowing) |
Annual: No change
Aggregate: $100,000 (excludes undergraduate borrowing) |
| Graduate | Direct Grad PLUS | Cost of attendance minus other aid | No longer available |
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Frequently asked questions
What is a limited exception? Do I qualify for it?
The limited exception lets some continuing borrowers keep borrowing under the prior rules for a period of time after July 1, 2026.
You may qualify for the limited exception if all of the following are true:
- you were enrolled in your program at MIT as of June 30, 2026, and
- you had a Direct Subsidized Loan, Direct Unsubsidized Loan, or Direct PLUS Loan disbursed for that program before July 1, 2026, and
- you remain continuously enrolled in the same program (you do not complete it, withdraw, or otherwise stop attending outside of an official, approved Leave of Absence).
For a Parent PLUS Loan, the student must meet these criteria in order for the parent to continue to borrow up to the cost of attendance minus other financial aid, with no aggregate limit, for the limited exception period.
If you do not meet the limited exception eligibility criteria, then the new loan limits apply to you.
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How long does the limited exception last?
If you qualify, the limited exception applies for the shorter of:
- three academic years, or
- the difference between the published length of your program and the time you have already completed.
After that period ends (or earlier if you finish, withdraw, or stop attending), the new annual and aggregate limits apply to you.
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What happens if I lose my limited exception status?
Once you no longer meet the limited exception criteria, the new borrowing limits apply to you. This change is generally permanent.
You can lose limited exception eligibility if:
- you complete your program of study, or
- you withdraw or take a leave of absence outside of an official, approved Leave of Absence, or
- you stop attending for any reason, or
- you change your program in a way that counts as a new credential (e.g., moving from one degree program to a different one).
If you re-enroll later, you generally will not regain limited exception status, even in the same program. Before making any change to your enrollment, contact us at getaloan@mit.edu so a counselor can explain how it may affect your loan eligibility.
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How will part-time enrollment affect my loans? What is loan proration?
Beginning July 1, 2026, your federal loan eligibility will be reduced in proportion to your enrollment if you enroll less than full-time. Visit the Registrar’s Office site to learn more about how registration load is calculated. This applies to both continuing and new borrowers; there is no limited exception for proration.
Example: If you are a rising junior dependent undergrad and a continuing borrower, your annual loan limit is $7,500 if you enroll at full time (36+ units per term). If you enroll at half-time (18–26 units) in the fall, the portion of your annual loan limit for that term is reduced by half. If you planned to borrow more than the reduced limit, your loan for that term must be lowered to the new limit.
Because this reduction may take place after your loan has been disbursed, it can result in a balance owed to MIT. If you borrow a federal loan and later consider reducing your course load, contact us at getaloan@mit.edu before you make the change. A counselor can estimate any required loan reduction and the balance you may owe.
Parent PLUS Loans are not subject to proration for less-than-full-time enrollment.
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What’s changing about repayment plans?
OBBBA streamlines repayment options into two choices:
- Repayment Assistance Program (RAP), a new IDR plan with loan forgiveness after 30 years of repayment. RAP is a qualifying plan for Public Service Loan Forgiveness (PSLF).
- Tiered Standard Plan, fixed payments over 10–25 years depending on loan balance. Parent PLUS loans may only be repaid under the Tiered Standard Plan.
Some existing income-driven repayment (IDR) plans are scheduled to end by 2028, and continuing borrowers will need to select a new plan.
If your loans will be first disbursed on or after July 1, 2026…
You must repay all new Direct Loans under the RAP or the Tiered Standard Plan, and all new Parent PLUS Loans only under the Tiered Standard Plan. This applies to new borrowers as well as continuing borrowers who take out a new loan on or after July 1, 2026.
If you are in repayment and have no new loans disbursing on or after July 1, 2026…
Continuing borrowers may continue to enroll in the legacy fixed payment repayment plans04 Standard, Graduated, or Extended Repayment Plans. For more information, see <a href="https://studentaid.gov/manage-loans/repayment/plans" target="_blank" rel="noopener">Federal Student Aid’s Repayment Plans page</a>. and legacy IDR plans,05 Income-Based Repayment (IBR), Income-Contingent Repayment (ICR), or Pay As You Earn (PAYE) Plans. For more information, see <a href="https://studentaid.gov/manage-loans/repayment/plans" target="_blank" rel="noopener">Federal Student Aid’s Repayment Plans page</a>. and you may also opt in to RAP; you will not have access to the Tiered Standard Plan. You can switch between eligible plans at any time.
Parent PLUS Loan borrowers retain the same access but must take additional steps before either the IBR or ICR plans can be accessed. Disbursement of any new Direct Loan—including a Direct Consolidation Loan—on or after July 1, 2026, will limit your access to only the Tiered Standard Plan.
If you are in repayment through ICR, PAYE, or SAVE…
ICR and PAYE borrowers must transition to a new repayment plan (such as IBR (only if you borrowed prior to July 1, 2026 and do not borrow after) or RAP) by July 1, 2028, when both plans are scheduled to end.
The Saving on a Valuable Education (SAVE) plan has been eliminated and borrowers must transition to a new plan by September 29, 2026.
If you do not select a new eligible plan by the transition deadline, you may be automatically placed on the Tiered Standard Plan. Watch for guidance from your loan servicer.
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What’s changing about interest rates?
While not a change through OBBBA, the interest rate reduction for borrowers enrolled in auto pay will increase from 0.25% to 1% starting on July 1, 2026. The reduction is available for borrowers with Direct Loans disbursed on or after July 1, 2012.
If you’re currently enrolled in auto pay…
You do not need to take any action to receive this benefit. You’ll receive the larger interest rate reduction through June 30, 2028, as long as you remain in auto pay and continue repayment on your federal student loans.
If you’re not currently enrolled in auto pay…
In order to receive this benefit, you must enroll in auto pay through your loan servicer by September 30, 2026.
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What should I do now?
- Determine your student type and borrower status using the “Find your status” section at the top of this page.
- If you are a continuing borrower, check whether you qualify for the limited exception and understand how long it lasts.
- If you are a new borrower, refer to our Undergraduate loans and Graduate loans pages for current program information.
- Contact us at getaloan@mit.edu if…
- You plan to change your enrollment. Some changes (like reducing your course load, taking a leave, or changing programs) can permanently affect your loan eligibility.
- You expect to need funding beyond the new limits. We can help you review your options early, including payment plans, private loans, or other resources.
- You have questions about: borrowing eligibility, loan limits, qualifying for the limited exception, repayment options, and/or how these changes affect your individual funding situation.
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Additional resources
- Federal Student Aid: OBBBA Updates
- MIT Undergraduate Loans
- MIT Graduate Loans
- MIT Private Loan Guide
- ELMSelect: a third-party service that MIT partners with so that we can share the private loan options other students have chosen. You can search for rates and terms to compare loans, for free and with no registration.
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- The annual loan limit is the maximum amount of federal loans that you may borrow in a single academic year (up to cost of attendance minus other financial aid received). The cap resets every year up to aggregate limits. back to text ↑
- The aggregate loan limit is the total outstanding principal balance you can owe at any given time. If you pay down your existing federal loans, the remaining available borrowing limit opens back up. back to text ↑
- And dependent students, if your parent is unable to obtain a Direct PLUS Loan due to adverse credit. back to text ↑
- Standard, Graduated, or Extended Repayment Plans. For more information, see Federal Student Aid’s Repayment Plans page. back to text ↑
- Income-Based Repayment (IBR), Income-Contingent Repayment (ICR), or Pay As You Earn (PAYE) Plans. For more information, see Federal Student Aid’s Repayment Plans page. back to text ↑