»One Big Beautiful Bill Act's Impact on Undergraduate Student Loans

One Big Beautiful Bill Act's Impact on Undergraduate Student Aid Loans

 

On July 4, 2025, President Donald Trump signed the One Big Beautiful Bill Act (OBBB) into law. Significant provisions that will affect Undergraduate student loans are slated to take effect on July 1, 2026.

Important Changes to Federal Student Loans

 
The “One Big Beautiful Bill Act” (OBBB) changes how much students and parents can borrow through federal student loans. Below is a simplified overview of what this means for undergraduate students.
 
Most changes take effect July 1, 2026. Some details may change as the Department of Education releases more guidance.

Current Chapman Student (Legacy Borrowers)

 

If you or your parent already received a federal loan before July 1, 2026 for a program that started before that date, you may qualify for legacy status.

What stays the same:

  • Federal Direct Subsidized and Unsubsidized loan limits do not change.
  • Parent PLUS Loans can continue under current borrowing rules (up to Cost of Attendance minus other aid).

How long does legacy status last?

  • Parents may continue borrowing under current Parent PLUS limits:
  • Until the student finishes their current program, or
  • For up to 3 academic years, whichever comes first.
  • You may lose legacy status if you:
  • Take a leave of absence
  • Withdraw from a term
  • Break enrollment in the same program at the same institution

If legacy status is lost, new (more restrictive) loan limits will apply.

New Borrower Beginning On or After July 1, 2026

 

This applies if you:

  • Are new to Chapman, or

  • Change academic programs (changing majors is considered remaining in the same program), and

  • Borrow federal loans for enrollment starting on or after July 1, 2026

What stays the same:

  • Federal Direct Subsidized and Unsubsidized loan limits remain unchanged.

New borrowing limits:

  • Lifetime federal loan cap: $257,500 total across undergraduate, graduate, and professional study

    • Does not include Parent PLUS loans

  • Parent PLUS Loans: $20,000 per year per dependent student

    • $65,000 lifetime limit per dependent student; applies regardless of repayment, forgiveness, or discharge.

Loan Reductions for Less-Than-Full-Time Enrollment

 

Starting July 1, 2026:

  • If you enroll in fewer than 12 units in a term, your federal loans will be reduced.

  • This applies to all students, including those with legacy status.

  • There are no exceptions to this rule.

Federal Loan Repayment Changes

 

The new law also changes loan repayment options for students and parents. More details will be shared once the Department of Education releases official guidance.

Reminder: Financial Aid Eligibility at Chapman

 

To keep your financial aid, you must:

  • Successfully complete a minimum of 12 units per semester (full-time) or 24 units per academic year
  • Maintain the required GPA:
  • 2.75 GPA for Merit/Scholarships
  • 2.0 GPA for all other aid

Exceptions:

Need Help Managing Your Finances?

 
Chapman encourages students to join the Financial Wellness Peer Coaching Program, designed to help you build confidence and skills for managing your personal finances.
 

Helpful Resources