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Financial Aid OBBBA FAQs

The One Big Beautiful Bill Act (OBBBA) is federal legislation that makes significant changes to federal student loans, repayment options, Parent PLUS loans, and certain FAFSA and Pell Grant rules.

OBBBA was signed into law on July 4, 2025.

This page reflects the One Big Beautiful Bill Act (OBBBA) statute and the U.S. Department of Education’s proposed rules (NPRM published January 30, 2026). The Department of Education is still finalizing these rules, and some details may change when the final regulations are issued. Cedarville University will update this information as additional federal guidance becomes available.

This page was last updated on February 17, 2026.

When do the changes take effect?

  • 2025–26 award year: No changes apply.
  • Beginning July 1, 2026: Most borrowing limits, eligibility rules, and FAFSA changes take effect.
  • 2027–28: Changes to repayment plan and deferment options are phased in.

What areas are affected by OBBBA?

Undergraduate Student FAQs
Graduate and Professional Student FAQs
Loan Repayment FAQs

Undergraduate Student FAQs

What is a "new borrower"?

A new borrower is a student who did not receive a federal Direct or PLUS loan disbursement for their current program at Cedarville before July 1, 2026. New borrowers are subject to the new loan limits and repayment rules under OBBBA.

What is a "legacy borrower"?

A legacy borrower is a student for whom Cedarville received a federal Direct or PLUS loan disbursement for the student's bachelor's program before July 1, 2026, and who remains enrolled in a bachelor's program. Changing majors within a bachelor's program does not affect legacy status.

Legacy borrowers may continue borrowing under prior rules for up to three additional academic years or until program completion, whichever comes first.

Who qualifies for the Parent PLUS loan "legacy borrower" status?

A student qualifies if:

  • Cedarville received a federal Direct or PLUS loan disbursement for the student's bachelor's program before July 1, 2026, and
  • The student remains enrolled in a bachelor's program at Cedarville.

Changing majors within a bachelor's program does not affect legacy status.

What causes a student to lose "legacy borrower" status?

Legacy status ends immediately if the student:

  • Withdraws
  • Takes a leave of absence or stops out
  • Starts a new degree on or after July 1, 2026

What if I borrowed federal loans at another school?

Legacy status is program- and school-specific. If you did not receive a federal loan disbursement for your current program at Cedarville before July 1, 2026, you are considered a new borrower for that program. Prior borrowing still counts toward lifetime limits.

Can a student or parent opt out of legacy status?

No. Legacy provisions apply automatically when eligibility criteria are met and cannot be declined.

What happens if my program takes longer than three additional years?

After the legacy period ends:

  • New annual and lifetime loan limits apply
  • New Parent PLUS limits apply
  • Private education loans may be needed to cover remaining costs

Advance planning is strongly recommended.

Are Parent PLUS loans still available?

Yes, beginning July 1, 2026, Parent PLUS loans for new borrowers are capped at:

  • $20,000 per year per dependent student
  • $65,000 lifetime per dependent student

Limits apply across all parents combined for a student.

What are the undergraduate Direct loan limits?

Annual limits remain unchanged:

  • First year: $5,500 (additional $4,000 for independent students)
  • Second year: $6,500 (additional $4,000 for independent students)
  • Third year and beyond: $7,500 (additional $5,000 for independent students)

Aggregate limits:

  • $31,000 for dependent students
  • $57,500 for independent students

What if I am enrolled part time?

Beginning July 1, 2026, enrollment below full time (12 credits) may reduce annual loan eligibility.

Note: Students enrolled below half time (six credits) continue to be ineligible for Direct loans.

Are there FAFSA changes?

Yes, beginning with the 2026–27 FAFSA:

  • Certain family businesses, family farms, and family commercial fishing businesses are excluded from asset reporting on the FAFSA. This includes:
    • Family businesses with fewer than 100 full-time employees
    • Family farms where the family lives and materially participates in the operation
    • Family-owned fishing operations
  • Foreign earned income exclusions are added back when determining Pell Grant eligibility.

Are there changes to the Pell Grant?

Yes, beginning in 2026–27:

  • Students with non-federal aid covering full cost of attendance may be ineligible.
  • Students with a Student Aid Index at or above twice the maximum Pell Grant are generally ineligible.

Are FSEOG or Federal Work-Study going away?

No changes have been made. These programs remain subject to annual congressional funding.

Graduate and Professional Student FAQs

What is a "new borrower"?

A new borrower is a student who did not receive a federal Direct or PLUS loan disbursement for their current graduate or professional program at Cedarville before July 1, 2026.

What is a "legacy borrower"?

A legacy borrower received a federal loan disbursement for their current program before July 1, 2026, and remains continuously enrolled in that program.

Legacy status applies only to the specific program and lasts up to three additional academic years or until program completion, whichever comes first.

Is Graduate PLUS going away?

Yes, for new borrowers. Beginning July 1, 2026, Graduate PLUS loans are no longer available to students who are new borrowers for their program.

What causes a student to lose "legacy borrower" status?

Legacy status ends immediately if the student:

  • Withdraws
  • Takes a leave of absence or stops out
  • Changes degree programs
  • Starts a new degree on or after July 1, 2026

What if I borrowed federal loans at another school?

Legacy status is program- and school-specific. If you did not receive a federal loan disbursement for your current program at Cedarville before July 1, 2026, you are considered a new borrower for that program. Prior borrowing still counts toward lifetime limits.

Can a student opt out of legacy status?

No. Legacy provisions apply automatically when eligibility criteria are met and cannot be declined.

What happens if my program takes longer than three additional years?

After the legacy period ends:

  • New annual and lifetime loan limits apply.
  • Graduate PLUS is no longer available.
  • Private education loans may be needed.

Advance planning is strongly recommended.

What are the graduate and professional loan limits?

Annual limits:

  • Graduate programs: up to $20,500
  • Professional programs: up to $50,000

Lifetime limits:

  • Graduate: $100,000
  • Professional: $200,000
  • Overall federal loan lifetime limit (including undergraduate): $257,500

All prior borrowing counts toward lifetime limits.

Which programs are considered "professional"?

This classification is used only for loan limits. At Cedarville, current professional programs include:

Classifications will be confirmed in final regulations.

How do the graduate, professional, and lifetime loan limits work together?

Federal student loan limits work in three layers:

Program-level limits:

  • Undergraduate programs: up to $57,500 total
  • Graduate (non-professional) programs: up to $100,000 total
  • Professional programs: up to $200,000 total
  • These limits apply to how much you can borrow while enrolled in each type of program.

Lifetime federal loan limit:

  • All federal student loans you borrow in your own name — undergraduate, graduate, professional, and prior Grad PLUS — count toward a $257,500 lifetime limit.
  • Parent PLUS loans borrowed by a parent do not count toward this lifetime limit.

Program and lifetime limits apply at the same time. You must stay under both the limit for your current program type and the overall lifetime limit.

What if I am enrolled part time?

Beginning July 1, 2026, enrollment below full time (six credits) may reduce annual loan eligibility.

Note: Students enrolled below half time (three credits) continue to be ineligible for Direct loans.

What federal loans are available to new graduate borrowers?

Direct Unsubsidized loans only.
  • Subject to new annual and lifetime limits.
  • Graduate PLUS is not available.

What if federal loans are not enough?

Private education loans may be used to cover remaining costs. Cedarville offers access to ELMSelect to help compare lenders.

Is Federal Work-Study going away?

No changes have been made. This program remains subject to annual congressional funding.

Loan Repayment FAQs

What repayment plans will be available?

For loans first disbursed on or after July 1, 2026:

  • Tiered Standard Repayment Plan (fixed payments over 10–25 years)
  • Repayment Assistance Plan (RAP) (income-based with a $10 minimum payment)

Payments under both plans may qualify for Public Service Loan Forgiveness when other requirements are met.

Borrowers currently in ICR, PAYE, or SAVE must transition to a new plan by July 1, 2028.

Is Public Service Loan Forgiveness changing?

No. PSLF remains available. Payments made under the new Repayment Assistance Plan (RAP) count toward PSLF when all eligibility requirements are met.

Are deferment and forbearance options changing?

Beginning July 1, 2027:

  • Economic hardship and unemployment deferments are eliminated.
  • Forbearance remains available but is limited to nine-month increments and 24 months total.

Who do I contact with repayment questions?

After leaving school, contact your loan servicer through StudentAid.gov for repayment assistance.

Need Help?

To discuss how these changes affect your borrowing while enrolled, schedule an appointment with Cedarville’s Financial Aid office.