Understanding the One Big Beautiful Bill (OB3)

Changes to Federal Student Loans

• Lower Federal Loan Limits: Annual and lifetime borrowing caps for federal student loans are changing. While the undergraduate student loan annual and aggregate loan limits will not change under the new rules, students will be subject to a lifetime borrowing limit of $257,500. Further, graduate student loan annual limits remain $20,500. The aggregate amount will change to $100,000. Note, students in PharmD program will have an annual student loan limit of $50,000 and an aggregate limit of $200,000. Note, WCU may award higher loan amounts to programs included in the interim guidance provided by the Department of Education on June 29, 2026. That guidance along with a full list of programs can be found here: Update to List of Professional Degree Programs Due to Court Order | Knowledge Center. Please keep in mind, this guidance is subject to change at any time and may reduce future aid eligibility.
• Changes to Graduate PLUS Loan Program: Federal Grad PLUS will be eliminated for students that have not had a student loan disburse before July 1, 2026.
• Changes to Parent Borrowing: Under the new rules, Federal Parent PLUS loans will be capped at $20,000 per academic year or $65,000 aggregate limits per dependent.
• “Legacy Provision” (Limited Exception): Students (or parents for dependent students) who have already borrowed federal loans prior to the law taking effect may be allowed to continue under current loan limits and program rules. Students must be actively attending school, remain continuously enrolled, and have at least one loan disbursed before July 1, 2026. This legacy provision provides students/parents with access to the current loan limits and loan programs for the lesser of three academic years or the remainder of the time to complete their program known as the estimated time to complete (ETTC).
• Legacy Provision and Transfer Credits: As required by the federal regulation, Universities must reduce the published program length used in the ETTC calculation for students that transfer in credits. When calculating how long students can be funded under the Legacy Provision, we must use the full-time definition (12 credits per semester for Undergrad and 6 credits per semester for Grad) when determining how many semesters must be reduced from the published program length based on the number of transfer credits. Further, when evaluating students that are enrolled in part-time programs published with part-time program lengths (wherein a student cannot enroll full time); or programs designed with a full-time and a part-time pathway within the same program, and the student enrolls in the part-time pathway (in which case the school would use the full-time program length) we must use the full-time equivalent when determining ETTC. For WCU, this means using the accelerated time to complete for all programs that paces such as accelerated plus, working professional, or nights and weekend. When determining the length of time, a student has the legacy provision it is the lesser of ETTC minus what the student has already completed at WCU or 3 academic years.
• Current Borrowers: You may be able to keep your existing borrowing structure under the legacy provision for the period described above. Note, if you withdraw from school or take a leave of absence, you will no longer be eligible for the legacy provision, and the new rules will apply to you and how we package you.
• Schedule of Reduction: Beginning with loans packaged using the 2026-2027 FAFSA, student loans must be reduced for any academic year where the student is not full-time enrollment status (24 credits for undergraduate programs and 12 credits for graduate programs). This means that a student’s planned course load will have a proportionate impact on the amount of loans they are eligible for. Further, students that drop courses during the academic year will have their eligibility re-evaluated and likely reduced, regardless of the grade assigned for the dropped course. Note – The Legacy Provision does not apply to the Schedule of Reduction provision; all federal student loans disbursed on or after July 1, 2026, will be subject to this new rule.

The Department of Education has published helpful information for students and parents below at: https://studentaid.gov/announcements-events/big-updates. The Student Financial Services office is also available to answer any questions you may have. Please feel free to contact your Financial Aid Advisor with questions.