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Federal Student Loan Changes
This FAQ is intended to help Ithaca College students and families understand how changes resulting from the legislation commonly referred to as the One Big Beautiful Bill Act (OBBBA) may affect their borrowing options and what alternatives are available beginning July 1, 2026.
Updates as of 4/15/26
Graduate Students
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Graduate students will continue to be eligible for the Federal Direct Unsubsidized Loan, with an annual borrowing limit of up to $20,500 per academic year, provided the student:
- Is enrolled at least half-time
- Maintains Satisfactory Academic Progress (SAP)
- Meets all other federal Direct Loan eligibility requirements
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No. Under OBBBA the Federal Grad PLUS Loan program is being fully eliminated. This change applies broadly and is not related to whether a program is considered professional or non-professional.
- Legacy Provision: Current borrowers can continue their current program under the old loan limits with Graduate PLUS loans until the completion of the program, or three academic years, whichever is first. 2026-27 & Beyond Graduate/Professional Student Loan Borrowing Limits.
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If your educational costs exceed the $20,500 annual federal loan limit, you may consider the following options:
Private/Alternative Education Loans
Private or alternative loans are non-federal loans offered by banks, credit unions, and other private lenders. These loans:
- Are credit-based
- Typically require a review of the borrower’s credit history
- May have variable or fixed interest rates, depending on the lender
Students who do not meet a lender’s credit criteria on their own may apply with a creditworthy co-signer , which can improve approval chances and may result in more favorable interest rates. Ithaca College provides a private loan comparison tool where students can review and compare lender options:
ELM Select: https://www.elmselect.com/v4/school/927/program-select
Interest-free payment plans
Ithaca College offers interest-free payment plans that allow students and families to spread charges over multiple payments rather than paying the full balance at once. More information about payment plans and other financing options can be found at https://www.ithaca.edu/tuition-financial-aid/how-to/set-payment-plan.
Undergraduate Students
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Most federal Direct Loan limits for undergraduate students remain unchanged under the OBBBA. Eligible undergraduate students may continue to borrow:
- Federal Direct Subsidized Loans (based on financial need)
- Federal Direct Unsubsidized Loans
Annual and aggregate loan limits continue to depend on the student’s dependency status and year in school.
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New borrowers will have an annual limit of $20,000 an aggregate limit of $65,000 per dependent student. Families who are unable to borrow through the Parent PLUS program may wish to explore:
- Private/alternative education loans (student or parent borrower)
- Ithaca College interest-free payment plans
What This Means for Current vs. New Borrowers
Current Borrowers
Students who have already borrowed federal student loans prior to the effective dates of the Big Beautiful Bill may be able to continue borrowing under existing rules for a limited period, depending on federal guidance and individual loan history. Repayment terms for loans already borrowed are not impacted by this legislation.
New Borrowers
Students borrowing federal loans for the first time once the new rules take effect will be subject to the updated loan structure and limits. This includes the elimination of the Federal Grad PLUS Loan and continued reliance on annual Direct Loan limits, along with alternative financing options.
Because federal guidance and implementation timelines may continue to evolve, Ithaca College will share updates as additional information becomes available.