Federal Loan Changes (OBBB)
A page within Financial Aid
On July 4, 2025, the federal legislation commonly referred to as the One Big Beautiful Bill Act (OB3), officially named the Working Families Tax Cut Act (WFTC), was signed into law.
This legislation makes significant changes to federal student loan programs. Some of these changes may affect your borrowing eligibility beginning with the 2026-27 academic year.
Our office is actively reviewing new federal guidance and implementing these changes. While many provisions are now finalized, additional clarification from the U.S. Department of Education is still expected. As new information becomes available, this page will be updated.
All Federal Student Loan Borrowers
Beginning with the 2026-27 academic year, federal law requires Direct Loan amounts to be based on a student's enrollment level.
Students enrolled less than full-time, but at least half-time (the minimum enrollment required for loan eligibility), will receive a prorated Federal Direct Loan based on the number of credits they are enrolled in.
Our office reviews enrollment before each loan disbursement to ensure the correct loan amount is awarded.
Changes to your enrollment after your loan disburses will require our office to reduce the disbursed loan based on those enrollment changes.
For example, if you begin the fall semester as a full-time student but later withdraw from a course, your fall loan(s) will be reduced, resulting in a balance owed to the university.
Student Loan Repayment Changes
The new legislation also updates the repayment plans available for federal student loans.
Students who receive their first federal loan on or after July 1, 2026, will generally have two repayment options:
- Standard Tiered Repayment Plan
- Repayment Assistance Plan (RAP)
Borrowers who do not receive any new federal loans after July 1, 2026 may continue using current repayment plans, including:
- Standard Repayment
- Graduated Repayment
- Extended Repayment
- Income-Based Repayment (IBR)
These borrowers may also choose to enroll in the Repayment Assistance Plan (RAP).
If no repayment plan is selected before July 1, 2028, eligible borrowers will automatically be placed into RAP under current federal guidance.
For additional information about repayment options, visit the Federal Student Aid website.
Undergraduate Students
Federal legislation also made changes to how much parents may borrow through the Federal Direct Parent PLUS Loan beginning with the 2026-27 academic year.
Before these changes, eligible parents could borrow up to the student's cost of attendance, minus any other financial aid the student received.
Beginning July 1, 2026, new federal borrowing limits apply:
- Maximum annual Parent PLUS Loan: $20,000 per student
- Maximum lifetime Parent PLUS Loan: $65,000 per student
These limits apply to the total amount borrowed for each individual student.
Parent PLUS "Legacy" Borrowers
Some parents may continue borrowing under the previous Parent PLUS rules.
Parents who received a Parent PLUS Loan before July 1, 2026, and whose student remains continuously enrolled in the same academic program, may continue borrowing under the prior rules for up to three years or until the student completes their degree, whichever comes first.
Parent PLUS Loan Limits
| Before July 1, 2026 | After July 1, 2026 | |
| Annual Borrowing Limit | Cost of attendance minus other financial aid. | Up to $20,000 per student each academic year |
| Lifetime Borrowing Limit | No federal lifetime limit | Maximum of $65,000 per student |
Graduate Students
One of the most significant provisions of the new law is the phase-out of the Graduate PLUS Loan for many future borrowers.
Students who may continue borrowing Grad PLUS:
- Must have borrowed a Federal Direct Loan before July 1, 2026, and
- Continue enrollment in the same academic program without interruption.
Eligible students may continue receiving Grad PLUS Loans for up to three years or until they complete their current program, whichever occurs first.
Important: Changing to a different academic program may end your eligibility for the Graduate PLUS Loan.
Students who become first-time Federal Direct Loan borrowers on or after July 1, 2026, will no longer be eligible to borrow Graduate PLUS Loans.
Annual Federal Loan Limits
Graduate students will generally continue to qualify for up to $20,500 per academic year in Federal Direct Unsubsidized Loans.
UW-La Crosse doesn’t currently have any programs classified as Professional Degree Programs.
Federal Borrowing Limits: Before and After OB3
| Before July 1, 2026 | Beginning July 1, 2026 |
| Lifetime Direct Loan limit of $138,500 (includes undergraduate borrowing). Graduate PLUS Loans could be borrowed up to the full cost of attendance after other aid was applied. | Lifetime Direct Loan limit remains $138,500 (includes undergraduate borrowing). New first-time borrowers are no longer eligible for Graduate PLUS Loans. |
Additional Financing Options
Students and families whose educational expenses exceed available federal loan limits may wish to explore private educational loans.
Private loans are credit-based and often require a creditworthy borrower or cosigner. Interest rates, repayment terms, and borrower benefits vary by lender.
Our Financial Aid Office provides information about private educational loans and resources to help families compare available lenders. We encourage students to carefully review all borrowing options before accepting additional loan debt.
We understand these federal changes may raise questions about financing your education.
If you have questions about how these updates affect your eligibility or borrowing options, please contact the Financial Aid Office. Our staff is available to discuss your individual situation and help you understand the options available to you.
