One Big Beautiful Bill Act (OB3) Financial Aid Update

Incoming Fall 2026 freshmen and transfer students will fall completely under the new federal policy. 

• Loans: Incoming and transfer students will adhere to the new Federal Direct Loan limits as shown in the table below. For parents wanting to utilize the Parent PLUS loan, parents may borrow up to $20,000 per year per child, with a lifetime limit of $65,000 per child. 

Federal Direct Loan Borrowing Limits for Undergraduate Students

*Lifetime limit excludes Parent PLUS

• 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 less than full time.
  • Reduced Annual Loan Limit Percentage = (Number of Credit Hours Enrolled for the Term/Number of Credit Hours Considered Full Time for that Term for the Program of Study) X 100 
  • For a full-time example, a dependent freshman student enrolled in 12 credit hours for fall and spring will be able to borrow $2,750 each semester. For a part-time example, a dependent freshman student enrolled in 6 credit hours for fall and spring, which is 50% of full-time hours, will only be able to borrow up to 50% of the loan limit for the semester, or $1,375. 
• Pell: Students may be ineligible for a Pell Grant if the full cost of attendance is covered with non-federal grants and scholarships or, if the student’s Student Aid Index (SAI) is greater than twice the maximum Pell Grant. 

Many students currently enrolled as of Spring and Summer 2026, who have previously borrowed federal direct loans, 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. Legacy eligibility is determined by federal law and is automatically applied if a student qualifies. It cannot be waived or declined.
• Legacy Provisions 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. Undergraduates may change majors as long as they remain at the undergraduate level.
  • There is no withdrawal or break in enrollment.
    • For semester students, the summer term is not compulsory. However, if you withdraw from the summer term, it will be considered a drop in enrollment. This will result in a loss of the legacy provisions.
    • For trimester students, not attending the summer term is considered a break in enrollment which will make you ineligible for the legacy provisions.
  • The student must be within their expected time to complete the program (the shorter of three academic years or the remaining program length).
  • The calculation for the student’s Expected Time to Credential (ETTC) or remaining program length, is based on:
    • The determined length of the student’s academic program.
    • The number of academic terms the student has completed in that program.
    • For transfer students only, the number of credits they have earned toward their degree as of Spring 2026.
  • For ETTC purposes, each completed academic term counts, regardless of enrollment intensity or whether the student received federal financial aid during that term.
• 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 less than full time.
  • Reduced Annual Loan Limit Percentage = (Number of Credit Hours Enrolled for the Term/Number of Credit Hours Considered Full Time for that Term for the Program of Study) X 100 
  • For a full-time example, a dependent freshman student enrolled in 12 credit hours for fall and spring will be able to borrow $2,750 each semester. For a part-time example, a dependent freshman student enrolled in 6 credit hours for fall and spring, which is 50% of full-time hours, will only be able to borrow up to 50% of the loan limit for the semester, or $1,375.
• 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. 

Incoming Fall 2026 Professional degree students will fall completely under the new policy. Professional degrees (as defined by the Department of Education) offered at Baylor include:

• Law (J.D.)
• Theology (M.Div.)
• Clinical Psychology (Psy.D.)
• Athletic Training (MAT)*
• Nursing Practice (DNP)*
• Occupational Therapist (OTD)*
• Physical Therapy (DPT)*
• Physician Assistant Studies (MPAS)*
• Speech-Language Pathology (M.S. SLP)*

* On June 29, 2026 these programs were added to the Interim List of Programs considered Professional under the new rules established by the One Big Beautiful Bill Act. These degrees can be treated as Professional during the Court stay associated with a recent ruling by the U.S. District Court for the District of Columbia. If additional changes to this list are made in light of future court decisions, Baylor will notify impacted students. 

• Loans:
  • Graduate PLUS loans are no longer available to new borrowers.
  • The new annual loan limit for professional students is $50,000 a year with a program limit of $200,000 which does not include undergraduate loans.
  • The lifetime federal loan limit is $257,500 which does not include undergraduate Parent PLUS loans.
• 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 less than full time. 

Many students currently enrolled in Spring and Summer 2026, who have previously borrowed federal direct loans, will fall under the legacy provisions. See the Incoming Professional Students policy above for a complete list of professional degree programs offered at Baylor. 

• Legacy Provisions: Allows for continuing students to temporarily continue to borrow under the prior federal loan rules. This means that students who qualify for legacy provisions may continue using Graduate PLUS loans and the prior federal loan limits. 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 Direct Federal 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.
    • Law Students: For students who start in fall, summer is not a mandatory term, so non-attendance will not be considered a break in enrollment.
    • Law Students: For students who start in spring, summer is a mandatory term, so non-attendance will be considered a break in enrollment.
  • The student must be within their expected time to complete the program (the shorter of three academic years or the remaining program length).
  • The calculation for the student’s Expected Time to Credential (ETTC) or remaining program length, is based on:
    • The determined length of the student’s academic program.
    • The number of academic terms the student has completed in that program.
    • For transfer students only, the number of credits they have earned toward their degree as of Spring 2026.
  • For ETTC purposes, each completed academic term counts, regardless of enrollment intensity or whether the student received federal financial aid during that term.
• 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 less than full time.
• If you do not qualify for the legacy provisions, please see the Incoming Professional Student section for more information about the changes to federal financial aid. 

Incoming Fall 2026 graduate degree students will fall completely under the new policy. See Incoming Professional Students policies above for a complete list of professional degree programs offered at Baylor. 

• Loans:
  • The Graduate PLUS loan is no longer available.
  • 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.
• 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 less than full time. 
  • Reduced Annual Loan Limit Percentage = (Number of Credit Hours Enrolled for the Term/Number of Credit Hours Considered Full Time for that Term for the Program of Study) X 100 
  • Federal Direct loans will be reduced based on enrollment intensity. For a full-time example, a graduate student enrolled full time, or 9 credit hours, will be able to borrow $10,250 per semester. For a part time example, a graduate student enrolled in 6 credit hours, which is 67% of full-time hours, will only be able to borrow 67% of the loan limit for the semester, or $6,868 each semester.

Many students currently enrolled in Spring and Summer 2026, who have previously borrowed Federal Direct loans, will fall under the legacy provisions. See Incoming Professional Students policies above for a complete list of professional degree programs offered at Baylor. 

• Legacy Provisions: Allows for continuing students to temporarily continue to borrow under the prior federal loan rules. This means that students who qualify for legacy provisions may continue using Graduate PLUS loans and the prior federal loan limits. 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.
    • For trimester students, not attending the summer term is considered a break in enrollment which will make you ineligible for the legacy provisions.
    • For semester students, the summer term is not mandatory. But if you attend summer and withdraw, it will be considered a drop in enrollment. This will result in a loss of the legacy provisions.
  • The student must be within their expected time to complete the program (the shorter of three academic years or the remaining program length).
  • The calculation for the student’s Expected Time to Credential (ETTC) or remaining program length, is based on:
    • The determined length of the student’s academic program.
    • The number of academic terms the student has completed in that program.
    • For transfer students only, the number of credits they have earned toward their degree as of Spring 2026.
  • For ETTC purposes, each completed academic term counts, regardless of enrollment intensity or whether the student received federal financial aid during that term.
• 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 less than full time.
  • Reduced Annual Loan Limit Percentage = (Number of Credit Hours Enrolled for the Term/Number of Credit Hours Considered Full Time for that Term for the Program of Study) X 100 
  • Federal Direct loans will be reduced based on enrollment intensity. For a full-time example, a graduate student enrolled full time, or 9 credit hours, will be able to borrow $10,250 per semester. For a part time example, a graduate student enrolled in 6 credit hours, which is 67% of full-time hours, will only be able to borrow 67% of the loan limit for the semester, or $6,868 each semester.
• If you do not qualify for the legacy provisions, please see the Incoming Graduate section for more information about the changes to federal financial aid.