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Upcoming Changes to Graduate Federal Student Loans under the One Big Beautiful Bill Act

Significant changes to federal student loans were recently enacted through the One Big Beautiful Bill Act (OBBBA), passed by Congress on July 3, 2025, and signed into law on July 4, 2025.

These changes will affect how graduate and professional students finance their education beginning July 1, 2026.

Please review this page carefully, as it outlines how the new rules may apply to you.

Important Notes:

  • The information below reflects the most current guidance available but is subject to change as additional updates are released by the U.S. Department of Education.
  • For purposes of these changes:
    • JD students are classified as Professional Students
    • LLM students are classified as Graduate Students

This page covers:

  • A. Key Changes
  • B. What This May Mean for You
  • C. Financial Guidance Resources

A. Key Changes

  1. Elimination of the Graduate PLUS Loan Program

Beginning July 1, 2026, the Federal Graduate PLUS Loan Program will be discontinued for new borrowers.

Legacy Provision:

Santa Clara University Law students who have a Graduate PLUS Loan disbursed before July 1, 2026, and remain continuously enrolled in the same program may continue borrowing:

  • Up to $20,500 in Direct Unsubsidized Loans, and
  • Graduate PLUS Loans up to the full cost of attendance,
    through June 30, 2029, or until program completion, whichever occurs first.

  1. New Annual and Aggregate Loan Limits for New Borrowers (After June 30, 2026)

Students who have not received a Direct Unsubsidized Loan disbursement before July 1, 2026 (“new borrowers”) will be subject to new borrowing limits:

Student Type Annual Limit Aggregate Limit (Lifetime)
Graduate (LLM) $20,500 $100,000
Professional (JD) $50,000 $200,000

A combined lifetime federal borrowing cap of $257,500 will also apply, which includes up to $57,500 borrowed for undergraduate study.

Note: Graduate PLUS Loans will not be available to new borrowers after July 1, 2026.

Legacy Provision:

Students who received both a Direct Unsubsidized Loan and a Graduate PLUS Loan prior to July 1, 2026, and remain enrolled in the same program at Santa Clara Law, may continue borrowing under current rules through June 30, 2029, or until program completion.

  1. Proration of Loans Based on Enrollment Status

Beginning July 1, 2026, new borrowers enrolled less than full-time will be eligible for loans prorated based on their enrollment level. Additional details are forthcoming from the Department of Education.

 

B. What This May Mean for You

Santa Clara Law’s Office of Financial Aid does not encourage or discourage borrowing. Our goal is to ensure that you are informed and supported as you make decisions about financing your legal education.

Here are some scenarios that may apply to you:

  1. If you are a JD student who has not yet borrowed a Direct Unsubsidized Loan and a Graduate PLUS Loan:
    Beginning July 1, 2026, your annual borrowing cap will be $50,000, and no Graduate PLUS Loans will be available.
    • If you anticipate needing to borrow more than $50,000 after this academic year, consider borrowing both loans during the 2025–26 academic year to preserve eligibility under the legacy provision.
  2. If you are an LLM student and have borrowed (or will borrow) Graduate PLUS Loans during the 2025–26 academic year:
    You are covered under the legacy provision and may continue borrowing Graduate PLUS Loans up to the full cost of attendance through June 30, 2029, or until the end of your program, whichever comes first.
  3. If you are an LLM student who has not yet borrowed a Direct Unsubsidized Loan and a Graduate PLUS Loan:
    Beginning July 1, 2026, your annual borrowing cap will be $20,500.
    • If you anticipate needing more than that after this academic year, consider borrowing a Graduate PLUS Loan during 2025–26 to preserve legacy eligibility.

C. Financial Guidance Resources

  • Meet with a Law Financial Aid Officer: Santa Clara Law’s Financial Aid Office is here to help you understand and manage your financial options.
    • Walk-in Hours: Monday, Tuesday, and Thursday, 10:00am - 2:30pm
    • Schedule an appointment: Call 408-554-5048 or email lawfinancialaid@scu.edu
  • Meet with a Financial Counselor: In partnership with AccessLex Institute, Santa Clara Law students can schedule free one-on-one financial counseling sessions with accredited financial professionals.

Stay Informed

We will continue to update this page as more information becomes available from the Department of Education. You can also visit the U.S. Department of Education’s official site for updates.