Federal Updates (OB3)
This page highlights financial aid impact under the federal legislation One Big Beautiful Bill Act (OB3 or OBBBA).
OB3 introduces significant changes to federal student aid programs. Some provisions are clear, but others still require clarification from the U.S. Department of Education. We know that students, families, and staff have questions. We do as well. As we receive additional guidance and official updates, we will continue to revise and expand this webpage so it reflects the most accurate and useful information available. This content reflects the latest guidance on OB3 and may change as new information is released.
What is OB3? The One Big Beautiful Bill Act was enacted into law on July 4, 2025, through the federal budget reconciliation process. This legislation contains major changes that significantly reshape federal student aid across the country.
What changed under OB3?
Federal Loan Program Changes
Changes to the following Federal Student Loan Programs will be effective July 1, 2026:
- Elimination of Graduate PLUS Loan Program
- Changes to Parent PLUS annual and loan limits
- Changes to Graduate/Professional annual and aggregate loan limits
- Changes to Federal Loan Program lifetime limits
- Loan Reduction for students below full-time enrollment (see below)
Less Than Full Time Loan Adjustments
One of the biggest changes affects how students can borrow federal Direct Loans. Beginning in the 2026–2027 academic year, annual federal subsidized and unsubsidized loan amounts will be reduced based on enrollment status. Students enrolled less than full time will only be eligible to borrow a portion of the standard loan amount, based on the number of credit hours they are taking. However, federal regulations still require at least half-time enrollment to receive federal loans (that did not change from before).
This adjustment, known as a “schedule of reduction”, applies throughout the semester. If a student drops classes at any point, the institution must recalculate the student’s eligibility and reduce any previously disbursed loan funds to match the new enrollment level.
Before OB3, students enrolled at least half time were eligible to receive the full annual federal loan amount. Under the new policy, students enrolled between half time and full time will no longer receive the full amount. Eligibility is now determined directly by the number of registered credit hours.
Loan eligibility for less than full-time enrollment is calculated using a standard formula. This rule applies to all Direct Loan borrowers, including undergraduate, graduate, and professional students. It also applies to legacy borrowers who received Direct Loans before July 1, 2026.
Estimate your Loan Reduction Amount
Use the calculator below to estimate the percentage of your loan you qualify for based on your enrolled (or planned) hours. Then apply that percentage to any Direct Loans (subsidized or unsubsidized) in your financial aid offer to estimate your reduced loan amount.
Loan Schedule of Reduction
Percentage Calculator
All three fields are required, marked with an asterisk.
Enter your enrolled (or expected) hours for each term below.
Parent PLUS Loans
Parent PLUS Loans will have new annual and lifetime borrowing limits per dependent student. These limits apply regardless of any prior loan forgiveness, repayment, cancellation, or discharge. Parents may borrow up to $20,000 per year, with a $65,000 lifetime limit per dependent student. If the student or parent borrowed a Federal Direct Loan before July 1, 2026, Parent PLUS borrowing may continue under the current limits for up to three academic years or the remainder of the student’s program, whichever is less.
Graduate PLUS loan
Graduate PLUS Loans will no longer be available starting July 1, 2026. Students who already have Graduate PLUS Loans may continue to borrow under the previous limits for up to three academic years or the remainder of their academic program, whichever is less. To remain eligible, students must be enrolled as of June 30, 2026, must have previously borrowed a federal loan for their current academic program, and must stay in the same program through graduation.
Federal Pell Grant Eligibility Changes
The following Pell changes take effect beginning July 1, 2026:
- Cost of Attendance Limit: Students whose scholarships, waivers, and other aid meet or exceed their full Cost of Attendance (COA) will no longer be eligible to receive a Pell Grant. This change will affect student-athletes on full-ride scholarships, as well as other students whose institutional, state, and/or private aid meet or exceed full COA. This is a change from previous regulations, which allowed students in some circumstances to be fully funded with scholarship aid and still received their Federal Pell Grant on top.
- SAI Threshold: Students with an Student Aid Index (SAI) of 14,790 or higher (twice the maximum Pell Grant which is $7,395) will be ineligible to receive a Pell Grant.
- Excluded Assets: Assets from family businesses with 100 or fewer employees, family farms, and commercial fishing operations will be excluded from the SAI calculation.
- Foreign Income Inclusion: Foreign income will now be added to a student’s adjusted gross income (AGI) when determining Pell eligibility.
Click here for more information regarding the Pell Grant.
Change overview based on Student Type
This information below provides an overview of key changes and explains the impact to students and families by student type.
Undergraduate Students
Incoming Freshman and Transfer Students
Incoming Fall 2026 freshmen and transfer students will fall completely under the new federal policy.
Undergraduate Loan Limits: Incoming Fall 2026 freshmen and transfer students will adhere to the new Federal Direct Loan limits as shown in the table below. Lifetime limits listed below exclude Parent PLUS.
| Undergraduate Annual Loan Limits | ||
|---|---|---|
| Year in School | Dependent Students | Independent Students |
| First-Year Annual Loan Limit: | $5,500 — No more than $3,500 of this amount may be in subsidized loans | $9,500 — No more than $3,500 of this amount may be in subsidized loans |
| Second-Year Annual Loan Limit: | $6,500 — No more than $4,500 of this amount may be in subsidized loans | $10,500 —No more than $4,500 of this amount may be in subsidized loans |
| Third-Year and Beyond Annual Loan Limit: | $7,500 — No more than $5,500 of this amount may be in subsidized loans | $12,500 — No more than $5,500 of this amount may be in subsidized loans |
| Undergraduate Aggregate and Lifetime Loan Limits | ||
| Loan Limits | Dependent Students | Independent Students |
| Subsidized and Unsubsidized Aggregate Loan Limit: | $31,000 — No more than $23,000 of this amount may be in subsidized loans | $57,500 — No more than $23,000 of this amount may be in subsidized loans |
| Lifetime Loan Limit: | $257,500 | $257,500 |
Parent PLUS Loans: will be subject to new annual and aggregate borrowing limits per dependent student. These limits apply regardless of prior loan forgiveness, repayment, cancellation, or discharge. Parents (combined) may borrow $20,000 per year ($65,000 aggregate limit) per dependent student.
Schedule of Reduction for Loans: Beginning the 2026-2027 academic year, all unsubsidized and subsidized annual loan amounts will be reduced based on enrollment status for those enrolled less than full time. Borrowers enrolled in less than full time will only be able to borrow loan amounts in direct proportion to their credit load, with a minimum half-time enrollment requirement.
Current Undergraduates – What’s Changing:
Schedule of Reduction for Loans: Beginning the 2026-2027 academic year, all unsubsidized and subsidized annual loan amounts will be reduced based on enrollment status for those enrolled less than full time. Borrowers enrolled in less than full time will only be able to borrow loan amounts in direct proportion to their credit load, with a minimum half-time enrollment requirement.
Parent PLUS Loans: New Borrowers will be subject to new annual and aggregate borrowing limits per dependent student. These limits apply regardless of prior loan forgiveness, repayment, cancellation, or discharge. Parents (combined) may borrow $20,000 per year ($65,000 aggregate limit) per dependent student.
Legacy Provision for Active Parent Plus Loan Borrowers: If the student or parent borrower received a Federal Direct Loan before July 1, 2026, while the dependent student was enrolled in a program of study, Parent PLUS borrowing may continue under current loan limits for up to three academic years or the remainder of the student’s expected time to credential, whichever is less.
What’s Staying the Same:
Many students currently enrolled as of Spring 2026 and Summer 2026, who have previously borrowed federal direct loans under their current program will fall under the legacy provisions.
Legacy Provisions: Allows current students or parents to temporarily continue to borrow under the prior federal loan rules and loan limits for 3 academic years or the remainder of their expected time to credential, whichever is less. (U.S. Department of Education: Loan Amount Limits)
- Annual: $5,500-$12,500 (based on year and dependency status)
- Total: $31,000 (dependent) or $57,500 (independent)
Legacy Provisions Qualifications:
- A Federal Direct Loan is disbursed on or before June 30, 2026.
- Undergraduates may change majors if they remain at the undergraduate level.
- There is no withdrawal or break in enrollment.
- If you do not qualify for the legacy provisions, please see the Incoming Freshmen/Transfer Undergraduate Students section for more information about the changes to federal financial aid.
Graduate Students
Incoming Graduate Students
Incoming Fall 2026 graduate degree students will fall under the new policy:
Graduate PLUS loan is no longer available.
Graduate Loan Limits: The new loan limit is $20,500 annually with a program limit of $100,000. The program limit does not include undergraduate loans. The lifetime federal loan limit is $257,500 which does not include undergraduate Parent PLUS loans.
| Program Type | Annual Limit | Aggregate Limit | Lifetime Maximum |
|---|---|---|---|
| Graduate and Professional: | $20,500 | $100,000 | $257,500 |
Schedule of Reduction for Loans: Beginning the 2026-2027 academic year, all unsubsidized annual loan amounts will be reduced based on enrollment status for those enrolled less than full time. Borrowers enrolled in less than full time will only be able to borrow loan amounts in direct proportion to their credit load, with a minimum half-time enrollment requirement.
Current Graduate Students – What’s Changing:
Current Graduate Students will follow the New Annual, Aggregate, and Lifetime Toal
Graduate Loan Limits: The new loan limit is $20,500 annually with a program limit of $100,000. The program limit does not include undergraduate loans. The lifetime federal loan limit is $257,500 which includes the Graduate Plus Loan but not undergraduate Parent PLUS loans.
| Program Type | Annual Limit | Aggregate Limit | Lifetime Maximum |
|---|---|---|---|
| Graduate and Professional: | $20,500 | $100,000 | $257,500 |
Graduate PLUS loans: are no longer available starting July 1, 2026. You may continue borrowing Graduate PLUS loans under prior limits for up to 3 academic years (or the remainder of your academic program, whichever is less) if you meet the criteria below:
- Are enrolled as of June 30, 2026, and
- Previously borrowed a federal loan for your academic program, and
- Remain in the same academic program through graduation
Schedule of Reduction for Loans: Beginning the 2026-2027 academic year, all unsubsidized annual loan amounts will be reduced based on enrollment status for those enrolled less than full time. Borrowers enrolled in less than full time will only be able to borrow loan amounts in direct proportion to their credit load, with a minimum half-time enrollment requirement.
What’s Staying the Same:
Many Graduate students currently enrolled as of Spring and Summer 2026, who have previously borrowed federal direct loans under their current program will fall under the legacy provisions.
Legacy Provisions: Allows for continuing students to temporarily continue to borrow under the prior federal loan rules. Students who qualify for legacy provisions may continue using Graduate PLUS loans and the prior federal loan limits. The student can continue to borrow under the current loan limits for 3 academic years or the remainder of their expected time to credential, whichever is less. Legacy eligibility is determined by federal law and is automatically applied if a student qualifies. It cannot be waived or declined.
Legacy Provision Qualifications:
- A Federal Direct Loan is disbursed on or before June 30, 2026.
- The student must remain in the same program at the same school.
- There is no withdrawal or break in enrollment.
Frequently asked questions
Learn more about common questions regarding the One Beautiful Bill Act (OB3).
Most changes take effect starting July 1, 2026. That includes new loan limits, the phase-out of Grad PLUS, and changes to Pell Grant eligibility.
Federal full-time status is 12 credits per semester for undergraduate students and 9 credits per semester for graduate students.
Students must be enrolled at least in a half-time load of financial aid-eligible classes to receive a Federal Direct Loan in any given semester. The minimum number of credits per semester to be considered half-time is 6 credits per semester for undergraduate and 4 credits per semester for graduate students for fall/spring or 3 credits per semester for summer. See our enrollment status page for more details.
Federal Loan Eligibility & Borrowing Limits
Yes, Borrowers enrolled in less than full time will only be able to borrow loan amounts in direct proportion to their credit load, with a minimum half-time enrollment requirement. The new law requires annual loan amounts to be adjusted in direct proportion to your enrollment status for fall and spring.
- Your eligibility will be determined just prior to disbursement for that term.
- The definition of full time for undergraduate students in an academic year is 24 hours (12 in fall and 12 in spring).
- The definition of full time for graduate students in an academic year is 18 hours (9 hours in fall and 9 hours in spring).
- Summer is a separate term for federal loan eligibility. Students must be enrolled at least half-time to be eligible for a loan in any semester.
Schedule of Reduction Formula
Any time a student is less than full time, we must follow this formula:
For fall and spring aid period, total credit hours enrolled include both fall and spring semesters, divided by 24 (if undergraduate) or 18 (if graduate). This then equals the percentage you may borrow of the maximum loan limit.
Undergraduate Example: Student is eligible for $5,500 in federal direct subsidized loan and is a junior undergraduate who will enroll in 9 hours in fall and 12 in spring.
9 + 12 = 21
21/24 = 0.875 x 100 = 88%
$5,500 x 88% = $4,440 max loan offered
for a undergrad student enrolled in 9 hours in fall and 12 hours in spring
Graduate Example: Student is eligible for $20,500 in federal direct unsubsidized loan. Student will enroll in 6 hours in fall and 6 hours in spring.
6 + 6 = 12
12/18 = 0.666 x 100 = 67%
$20,500 x 67% = $13,735 max loan offered
for a graduate student enrolled in 6 hours in fall and 6 hours in spring
A Schedule of Reduction (SOR) is a process that the Financial Aid office uses to adjust and prorate a student’s annual federal loan amount based on enrollment level. It applies to students who are enrolled less than full‑time but still meet the minimum half‑time requirement for federal loan eligibility. When a student is not enrolled full‑time, the office must reduce the loan amount to match the student’s actual credit‑hour load.
Financial aid offices will calculate a maximum annual loan limit by using the formula:
Please note, if you drop below your enrolled credits after funds have disbursed, you may be subject to retroactive loan reductions for the term, which can result in a balance owed to your school.
The new law does not change the annual or aggregate loan limits for undergraduate students, although undergraduate loans will now count towards the new lifetime limit.
Starting in the 2026–27 academic year, new federal loan limits will apply to graduate students.
Graduate students will be limited to the new loan limit of $20,500 annually with a program limit of $100,000. The program limit does not include undergraduate loans. The lifetime federal loan limit is $257,500 which includes those who have borrowed a Graduate Plus loan, but this does not include undergraduate Parent PLUS loans.
Federal Unsubsidized Loan: For those students who can complete the FAFSA, students will be able to receive a Federal Unsubsidized Loan to help cover the costs of their education.
Private Educational Loans: These are offered by private lenders, banks, and credit unions. The terms can vary depending on the lender and normally require a credit check. It is important to compare interest rates, repayment terms, and borrower protection policies offered by each lender.
Grad PLUS Loans are being phased out under the new law.
New graduate students will no longer be eligible to borrow Grad PLUS for terms that begin on or after July 1, 2026.
If you’re already borrowing Direct Loans before July 1, 2026, you may continue to borrow Graduate Plus Loans. To be eligible, you must be continuously enrolled in your current program of study.
It’s important to explore other funding options early. These may include:
- Internal and External Scholarships via the Scholarship Hub
- Installment Plans
- Alternative Loan Options
If you expect to need more funding than the new federal loan limits allow, contact One Stop to discuss options that may fit your program and timeline.
Yes, but starting July 1,2026 new limits apply:
New Parent Plus Loan Borrowers will be capped at $20,000 per year and $65,000 lifetime in PLUS borrowing per student. If both parents borrow on behalf of the same student, their combined borrowing is capped at $20,000 per year and $65,000 lifetime.
If you borrowed Parent PLUS Loans prior to July 1, 2026, you are eligible to borrow under the previous loan limits for the remainder of your student’s program or three years, whichever is shorter. The student must remain continuously enrolled in their current program. If the student takes a leave of absence or doesn’t complete a term, they will be considered a new borrower and subject to the new limits.
Legacy Loan Provision Status
If you’re currently enrolled and participating in the student and/or parent Federal loan programs at UT San Antonio, there are no changes to the aid you’ve already received.
If you borrowed a federal student loan at UT San Antonio for a term that began before July 1, 2026, you remain eligible to borrow under the previous loan limits for the duration of your current program or for three years (whichever is shorter), including Graduate PLUS loans.
If your parent borrowed a Parent PLUS loan at UT San Antonio for a term that began before July 1, 2026, your parent remains eligible to borrow under the previous loan limits for the duration of your current program or for three years (whichever is shorter).
No, students who meet the legacy provisions may not forfeit their legacy borrower status and must continue to borrow under the current loan regulations prior to OB3.
Yes. Undergraduates may change majors if they remain at the undergraduate level and keep their legacy provision status for up to three academic years or the remainder of the student’s expected time to credential, whichever is less.
Yes, if you change your graduate program on or after July 1, 2026, you will likely lose your legacy provision status. Keeping your Legacy Status after July 1, 2026 is explicitly tied to you being continuously enrolled in the same program of study at the same institution.
Graduate students currently enrolled as of Spring and Summer 2026, who have previously borrowed federal direct loans that were disbursed on or before June 30, 2026, under their current program will fall under the legacy provisions. To be eligible, you must be continuously enrolled in your current program of study.
Not enrolling in summer courses is not considered a break in enrollment for OB3, as long as the student is enrolled for the preceding Spring term and the following Fall term.
To be eligible for the previous loan limits (including Grad PLUS), you must be continuously enrolled in your current program of study. If you take a leave of absence or go on academic pause, you will be considered a new borrower subject to the new loan limits. You will also be considered a new borrower if you temporarily stop attending your current program of study to enroll in and/or complete another program.
Pell Grants, Scholarships & Gift Aid
No, effective July 1, 2026, Students who receive grants or scholarships from non-federal sources covering their entire cost of attendance (COA) are ineligible to receive a Pell Grant, even if otherwise eligible for the program.
The Bold Promise program covers 100% of tuition and mandatory fees; however, it does not cover the full cost of attendance. Pell Grant eligibility will only be impacted if you receive non-federal grants or scholarships from non-federal sources (institutional, state, or private) that meet or exceed your Cost of Attendance.
No, federal loan and aid changes under the new law will not affect your scholarships. Scholarships are awarded and renewed based on university policies and program criteria.