One Big Beautiful Bill Act (OB3)
Last updated 1/27/2026
Overview
The One Big Beautiful Bill Act (OB3) was signed into law on July 4, 2025. This law significantly changes federal student loan eligibility and repayment options for borrowers. This information is to help you understand what is changing, when the changes occur, and what it means for student borrowers.
These changes do not affect student borrowing for the current academic year (2025–2026). Students who have already borrowed federal loans for their current academic program may be considered a “legacy borrower” and therefore grandfathered. A legacy student must be enrolled in the same academic program through June 30, 2026, received a prior direct loan, and can have up to a maximum legacy status of 3 years.
All information reflects the current guidance available, and may change as federal rules are established.
Current Student Borrowers
While these new changes do not effect you directly if you maintain the conditions listed above, please note a few exceptions.
Loss of legacy status can include the following:
- Leave of absence – no enrollment within the university
- Seeking a duel degree – anything on or after July 1, 2026
- Time off from your current degreed program/ curriculum for research opportunities
Loan Eligibility for Legacy Status:
- Federal Direct Unsubsidized Stafford loan up to $20,500 annually
- Federal Direct Graduate Plus loan up to the cost of attendance annually
New Student Borrowers
New borrowing limits effective July 1st, 2026
Entering students for medical school graduate programs:
- Limited to $20,500 per year or $100,000 for the degree.
- No access to the Federal Direct Graduate Plus loan
- Access to additional funding from a private student loan. Learn more here.
Entering students for professional programs: Doctor of Medicine (MD) only
- Limited to $50,000 per year or $200,000 for the degree.
- No access to the Federal Direct Graduate Plus loan
- Access to additional funding from a private student loan. Learn more here.
**The Department of Education is still finalizing the definition of “Professional” but is expected to include only M.D programs Washington University School of Medicine.
Loan Repayment
Repayment plans limited to two options after July 1, 2028:
- Standard Repayment Plan
- 10-year repayment period: Less than $25,000
- 15-year repayment period: $25,000 to $49,999
- 20-year repayment period: $50,000 to $99,999
- 25-repayment period: $100,000 or more
- Repayment Assistance Plan (RAP)
- RAP is an income-driven repayment option that uses your most recent tax information to formulate your monthly payment amount
- RAP replaces all income-driven repayment (IDR) plans by July 1, 2028.
- Rap will qualify for public service loan forgiveness (PSLF)