OBBB Federal Student Aid Program Updates

Eloisa Perea-Dahl

Jul 28, 2026

4217

The U.S. Department of Education has announced changes to Federal Student Aid programs as part of the One Big Beautiful Bill (OBBB), which was signed into law on July 4, 2025. Below is a summary of these updates for graduate students.

*Please refer to FAQs here if additional support needed.

Federal Direct Unsubsidized Loan Reductions:

Direct Unsubsidized Loan amounts will be based on the number of credits you are taking.

Enrollment Status	Upcoming Changes
Half-Time (4-8 credits per term, less than 27 credits per academic year)	Reduced amount in proportion to full-time enrollment Split evenly across terms
Full-Time (9+ credits per term, 27+ per academic year)	Eligible to borrow up to $20,500.00 Split evenly across terms

Example:

If you enrolled in 6 credits during the Summer, 9 credits in the Fall, and 5 credits in the Spring, you would be considered half-time status for the academic year and eligible to borrow 74% of the full annual loan amount (6 + 9 + 5 = 20, 20 ÷ 27 = 74%).

Student Financial Services would use 74% to calculate the maximum annual loan amount you would be eligible for and divide it equally across your three terms. ($20,500.00 x 74% = $15,170.00, $15,170.00 ÷ 3 terms = $5,057.00 per term).

Updated Direct Loan Lifetime Borrowing Limits:

Beginning July 1, 2026, new federal loan borrowers will have updated lifetime borrowing limits. Relay graduate students who have borrowed Direct Unsubsidized Loans in their current program of study will be considered “legacy” borrowers and not subject to these new limits.

Degree Program Type	Annual Limit	Graduate Lifetime Limit	Overall Lifetime Limit
Graduate	$20,500.00	$100,000.00 (Only Graduate loans)	$257,500.00 (Undergraduate + Graduate + Professional loans)

Graduate students may be eligible for an increased $200,000.00 lifetime limit, from $100,000.00, if previously enrolled in a Professional degree program, or are actively enrolled in Graduate and Professional degree programs at the same time and more than 51% of credit hours are from the Professional degree program.
The new overall borrowing limit includes all loan amounts, including any that have been repaid, cancelled, forgiven, or discharged. This goes into effect for all student borrowers, whether “legacy” or “new.”

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Frequently Asked Questions (FAQs)

I’m not interested in a Direct Unsubsidized Loan and only want a TEACH Grant, how does this affect me?

At this time, The U.S. Department of Education has not announced changes to the Federal TEACH Grant program.

If I drop courses, will that affect how much I can borrow in Direct Unsubsidized Loans?

Yes, your loan eligibility is determined by your percentage of full-time status. The less credits you take while at a half-time status, the less you are eligible to borrow in Direct Unsubsidized Loans. If you drop courses after your loan is disbursed, your loan will not be adjusted, but it will affect how much you’re eligible for in future terms.

What if I only want a loan for a single term? Do I have to borrow loans for every term in the academic year?

No, you can still choose what term(s) you would like to borrow a loan for, but Student Financial Services will still be required to calculate your maximum eligible loan amount based on your half-time or full-time status.

How do I know if I will be a “legacy” borrower or “new” borrower beginning next academic year?

If you have borrowed a Direct Unsubsidized Loan in your current program of study while at Relay and remain enrolled in that program by July 1, 2026, you would be considered a “legacy” borrower and eligible for the previous Graduate lifetime limit, $138,500.00.

What if I transfer programs or take an approved Leave of Absence and return to Relay after July 1, 2026?

You would be considered a “new” borrower and subject to the new Graduate lifetime loan limit, $100,000.00.

Can I still borrow Direct Unsubsidized Loans for the new school year if I am a “new” borrower and have previously borrowed over $100,000.00 in graduate loans?

No, you would be ineligible for any additional graduate loans while you are at or above the new $100,000.00 limit.

Can I apply for a Graduate PLUS loan to compensate for my reduced Direct Loan borrowing?

Relay Graduate School of Education does not currently offer the Graduate PLUS loan. The Federal Direct Graduate PLUS loan program will be eliminated for “new” graduate borrowers beginning in the 2026-2027 academic year.