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.
• 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).
• 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.
• 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.), and Clinical Psychology (Psy. D.). 

• 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. Professional degrees (as defined by the Department of Education) offered at Baylor include Law (J.D.), Theology (M.Div.), and Clinical Psychology (Psy. D.).

• 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).
• 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 Law Students and Professional Students policies above for Law (J.D.), Theology (M.Div.), and Clinical Psychology (Psy.D.) degrees. 

• 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. 

Many students currently enrolled in Spring and Summer 2026, who have previously borrowed Federal Direct loans, will fall under the legacy provisions. See Professional Students policies above for Law (J.D.), Theology (M.Div.), and Clinical Psychology (Psy.D.) degrees. 

• 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).
• 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 Graduate section for more information about the changes to federal financial aid.