Overview of H.R.1 Bill, 119th Congress (2025–2026) AKA “One Big Beautiful Bill Act”
On July 4, 2025, President Donald Trump signed the H.R.1 bill (One Big Beautiful Bill Act) into law. Significant provisions in the bill that affect college students took effect on July 1, 2026. You can refer to this page for information and ongoing updates about how the bill may affect your financial aid, as well as factors to consider when navigating these changes.
Please also read our dedicated updates with additional details based on your academic level:
*Note on impacts on Student Aid Index (SAI): Cuts and restrictions in H.R. 1, although not directly related to financial aid, may reduce a family’s total resources. This in turn may change the calculation of their Student Aid Index (SAI) and thus affect their aid eligibility.
Enrollment level impacts
Beginning with the 2026–2027 academic year, annual federal student loan amounts will be determined by a student’s level of enrollment (the number of units you complete). This policy is referred to as the Schedule of Reduction for Loans.
Schedule of Reduction for Loans (SOR): For all students (graduate and undergraduate), annual federal student loan amounts will be based on your unit load for the entire academic year. All federal loans for student borrowers will be prorated for students enrolled less than full-time; Parent PLUS loan amounts are not affected by the SOR.
How is enrollment level determined? Your level of enrollment is based on your units for the entire academic year. For UC Berkeley, your annual unit load is determined by fall and spring semester enrollment.
What is considered full-time enrollment under the new law? Full-time enrollment for financial aid purposes is defined for most students as 24 units during the academic year, or 12 units per semester. This varies by program for some graduate programs.
How do enrollment limits impact students enrolled part-time? For student borrowers who are enrolled less than full time, your federal student loan amounts will be reduced, and you will only be able to borrow loan amounts in direct proportion to your unit load. The process that determines how much you can borrow if you are enrolled less than full time is called loan proration.
What is the minimum enrollment level for federal student loans? To qualify for prorated federal student loans, there is a minimum half-time enrollment requirement, which for most students is 6 units per semester.
What about summer enrollment? Enrolling in classes the summer following an academic year can also count to meet the 24-unit full-time requirement.
How are Pell Grants affected by SOR? Information about changes based on enrollment for Pell Grants is covered on the Undergraduate Students: Federal Updates page. Graduate students are not eligible for Pell Grants.
New federal loan limits and borrowing caps
What are the new limits for student loans under H.R.1?
There is a new lifetime borrowing cap for all students, a new loan limit for Parent PLUS loans, and new limits for graduate and professional student loans, as summarized below.
New lifetime borrowing cap on all federal student loans: The law contains a $257,500 lifetime borrowing cap on all federal student loans for all student borrowers, excluding Parent PLUS loan amounts.
Parent PLUS loan limit: New Parent PLUS loan borrowers will be subject to new loan limits: a $20,000 per year cap per dependent student and a $65,000 aggregate limit per dependent student, without regard to amounts forgiven, repaid, canceled, or discharged. These new annual and aggregate caps on Parent PLUS loans will limit the amount of federal loans that qualifying parents can take out to help pay for their child’s education.
Graduate loan limits: The law caps the annual graduate loan limits at $20,500 for graduate students and $50,000 for professional students. The aggregate limit is capped at $100,000 for graduate students and $200,000 for professional students. The law also eliminates the Graduate PLUS program for new borrowers. For detailed information, visit Graduate and Professional School Students: Federal Updates.
Note: The H.R.1 Bill does not include any changes to undergraduate federal student loan limits and maintains the current annual and aggregate borrowing limits for undergraduates. For a list of current loan limits, read Federal Student Aid Loan Limits.
What is the difference between the types of loan limits?
To understand changes to borrowing caps and loan limits under the H.R.1 Bill, please note the following loan definitions from the Office of Federal Student Aid:
Annual loan limit: The maximum loan amount you can borrow each academic year.
Aggregate loan limit: The maximum amount of unpaid principal balance minus any capitalized interest that you can have outstanding at any point in time on all of your subsidized and unsubsidized loans for undergraduate, graduate, or professional study.
Lifetime maximum loan limit: The maximum amount you can receive, regardless of any amount paid or discharged, in any combination of subsidized loans, unsubsidized loans, and PLUS loans for graduate or professional study.
The annual and aggregate limits vary depending on your program of study and, for undergraduate students, how far along you are in your program and whether you’re a dependent or an independent student.
What are the legacy provisions for loan limits?
New H.R.1 Bill loan limits took effect on July 1, 2026, with a legacy provision included for borrowers who borrowed under previous limits for the remainder of their program of study. Legacy student borrowers will be allowed to borrow under the previous student loan limits. Note: Details on handling legacy provisions for legacy borrowers are still in progress.
Federal loan repayment plans under H.R.1
What are the new loan repayment plan options under H.R.1? The new law replaces most existing income-driven repayment plans with a new framework for federal student loan repayment. If you borrow additional loan funds on or after July 1, 2026, your repayment options will be limited to the tiered Standard Plan (with fixed monthly payments and fixed terms) and the Repayment Assistance Plan (RAP). This will affect both current and prospective students who take out new federal loans.
Eligibility for legacy loan repayment: Current borrowers with no new loans made on or after July 1, 2026, can continue to be eligible to enroll in the legacy standard repayment plan.
When it’s time to repay federal loans, check your repayment plan. It’s a good practice to periodically check your repayment plan to make sure your repayment terms are the same and have not changed. If your repayment terms have changed, reach out to your loan servicer to verify the terms. Example: Make sure the current terms reflect your salary if you’re on an income-driven plan.
This summary of definition changes was published by the National Association of Student Financial Aid Administrators (NASFAA).
Repayment plan options for New Borrowers: Borrowers with new loans made on or after July 1, 2026, can be repaid using only two plans: a new standard repayment plan with fixed monthly payments and fixed terms ranging from 10 to 25 years based on the amount borrowed and the new income-based repayment plan, the Repayment Assistance Plan (RAP).
Repayment plan options for Current Borrowers: Borrowers with no new loans made on or after July 1, 2026, can continue to be eligible to enroll in the current Standard, current Income Based (IBR), Graduated, and Extended repayment plans, and could also opt in to the new RAP. Current borrowers enrolled in ICR, PAYE, or SAVE plans must transition to a new repayment plan by July 1, 2028. If no selection is made by that date, they will be moved into RAP.
Repayment Assistance Plan monthly payments calculation: Borrowers who either don’t have an Adjusted Gross Income (AGI) or whose AGI doesn’t reasonably reflect the borrower’s current income are required to provide the Department of Education (ED) with documentation to calculate their monthly payments.
Repayment Assistance Plan monthly payment amount: The law requires a $10 minimum monthly payment under RAP, and a borrower’s RAP monthly payment will be based on their AGI and number of dependents. Income and dependents are calculated separately for married borrowers who filed taxes separately from their spouses.
Income Based Repayment (IBR) plan changes: An earlier version of the bill proposed to remove the cap on monthly payments made under the IBR plan to no more than the borrower would have paid under the standard 10-year repayment plan, while the law retains the cap. The law also removes the requirement for borrowers to demonstrate a partial financial hardship in order to enroll in IBR. Additionally, the law retains cancellation for balances of loans repaid under IBR at 25 years.
Economic Hardship Deferment and Unemployment Deferment: The law eliminates the Economic Hardship Deferment and Unemployment Deferment for borrowers with an effective date for borrowers who received a loan on or after July 1, 2027. A borrower who receives a loan on or after July 1, 2027, may only be eligible for a discretionary forbearance for no more than 9 months during a 24-month period.
H.R.1 Bill frequently asked questions
Most of the changes apply specifically to U.S. federal student loans. Because international students are not eligible for federal financial aid, these changes likely will not affect them directly.
The law does not directly alter eligibility for federal student financial aid programs like Pell Grants for eligible students in mixed-status families.
However, the law does include other changes that likely will impact mixed-status families, including imposing stricter eligibility requirements for other federal benefits and limiting access to Child and Educational tax credits to individuals with valid Social Security Numbers.
Parents without Social Security Numbers (SSNs) can still contribute to the FAFSA.
Loan proration and enrollment level questions
The Student Loan Schedule of Reduction (SOR), or loan proration, is a determination of how much you can borrow if you are enrolled less than full time. Your federal student loan offer will be based on the number of units you take. If you enroll less than full time, your loan offer will be prorated based on your actual unit load. This change went into effect for the 2026–27 academic year.
All federal student loans are prorated based on enrollment. Loan reduction applies to any undergraduate, graduate, and professional school students who are enrolled less than full time and take out federal loans. Parent PLUS loan amounts are not affected by the SOR.
Loan proration applies to all undergraduate, graduate, and professional school students who are taking out any federal student loan (Parent PLUS loan amounts are not affected). The Financial Aid and Scholarships team is working hard to determine timing that mitigates the impacts the H.R.1 Bill will have on students. The timing is tricky as we have to balance two priorities: disbursing aid as early as possible to our students, and accounting for delays in full-time enrollment.
Financial aid disbursements and re-assessing enrollment:
If a student is not enrolled in 12 units for the fall semester by the scheduled financial aid disbursement on August 17, then a hold will be placed on their federal student loans. Other aid will still be disbursed.
Enrollment status will be re-assessed on the first day of instruction (August 26), and federal student loans will be disbursed based on enrollment at that time. Students enrolled in less than 12 units will receive a reduced (prorated) loan, students enrolled in the 12-unit minimum will receive their full loan.
Enrollment will be re-assessed again after the add/drop deadline. Any students who have enrolled in the 12-unit minimum at this time will have their federal student loan disbursement increased to their full loan amount.
The SOR policy requires a reduction in your federal loan if you are not enrolled full time. The reduction in loan amounts will be based on unit load for the entire academic year. Full-time enrollment for financial aid purposes is defined for most students as 24 units during the fall and spring semesters combined, or 12 units per semester. This is determined by the student’s program and the Office of the Registrar.
Full-time enrollment for financial aid purposes is defined for most students as 24 units during the fall and spring semesters combined, or 12 units per semester; this varies by program for some graduate programs. Enrollment hours are determined by the student’s program and the Office of the Registrar.
Note: While the 12-unit requirement applies for financial aid and federal student loans, some undergraduate students may have higher minimum course loads required by their college to meet undergraduate enrollment expectations.
“Full time” is cumulative for the academic year: If students are enrolled in less than 12 units in the fall, they can still take additional units in the spring to meet the 24 credit full-time requirement. Loans will be adjusted accordingly at the time of spring disbursement, based on the total enrollment change.
Yes, federal student loans will be adjusted if enrollment increases or decreases over the course of the academic year.
Dropping classes can decrease federal student loan amounts: If a student is enrolled in 12 units at the time of financial aid disbursement, but then drops below 12 units after disbursement, their loans will be adjusted to match their level of enrollment at the time of the next loan disbursement. Loans will be prorated based on their enrollment for the academic year at the time of spring financial aid disbursement.
Adding classes can increase federal student loan amounts: Students can add classes during the Adjustment Period of enrollment to increase unit loads, or take additional units in the spring to reach a cumulative 24 units for the academic year.
Summer classes: Enrolling in classes the summer following an academic year can also count to meet the 24-unit full-time requirement.
The following are key dates that you should be aware of to avoid impacts:
Financial Aid disbursement (August 17, 2026, typically 10 days before the start of the semester): If you are not enrolled in 12 units for the fall semester by the scheduled financial aid disbursement on August 17, a hold will be placed on your federal student loan.
First day of instruction (August 26): If you were not enrolled in at least 12 units by the August 17 date, the Financial Aid team will re-assess your enrollment status on the first day of instruction (August 26) and will disburse your federal student loan based on your enrollment at that time. If you continue to be enrolled in less than 12 units, you will receive a reduced, prorated loan. If you have enrolled in the 12-unit minimum, you will receive your full federal student loan.
Add/drop deadline (September 16 for undergraduate students and September 25 for graduate students): The Financial Aid team will re-assess enrollment status again after the add/drop deadline for any students who were still not enrolled in 12 units by the start of instruction. If you have enrolled in the 12-unit minimum at this time, your federal student loan will be increased to the full amount you chose to borrow.
Changes to enrollment after add/drop will affect spring semester federal student loans: Please note that any drops in enrollment during the fall semester will result in decreased federal loan disbursement for the spring semester, even if they occur after the add/drop or census dates. You must enroll in, and stay enrolled in, 24 units per academic year (fall and spring) to qualify for your highest possible federal student loan offer.
If you are on a waitlist, we recommend that you follow the advice in What to Do When You’re on a Waitlist, like setting up a swap for a backup class or checking for reserved seats. You may also speak to your academic advisor to explore additional course options for the semester.
Short-term emergency loans are also available for students who may need access to funds on a short-term basis while they work to reach full-time enrollment status. For example, if you are not enrolled in 12 units by the time financial aid disbursement begins (approximately 10 days before the start of instruction), and need to pay your off-campus rent before your loan eligibility is re-assessed on the first day of instruction. Applications for short-term emergency loans open on the first day of the semester, August 19, 2026.
If you have circumstances that prevent you from enrolling full time, we understand that this policy change creates added challenges for you. Unfortunately, there are no exceptions in the law for any students with reduced course loads. If you are impacted by changes in financial aid, please refer to the resources below.
We encourage you to explore other financing options that are available outside of federal loans. If you cannot enroll full time, we encourage you to look into these options (such as outside scholarships or private loans) as soon as possible. For ideas and inspiration, read one student’s advice on how to search for outside scholarships.
Legacy provision questions
Legacy provisions allow certain current students who were already using federal loans before the new regulations took effect to maintain their previous loan eligibility. These provisions generally last for up to three additional academic years or until the end of the program, whichever is sooner.
To qualify under the legacy provisions, current students must:
Have been enrolled in a program of study as of June 30, 2026,
Continue in that program after July 1, 2026, without exceeding the published program length, and
Have received the loan disbursement prior to July 1, 2026.
For students beginning a program in Fall 2026, you would generally not qualify for legacy provisions, because legacy loans had to be disbursed before the July 1, 2026 cutoff.
To maintain eligibility for the legacy provisions, you must remain continually enrolled in your program, complete your degree within the lesser of the program's standard scheduled length based on full-time enrollment (time to credential) or three years.
If you are behind pace to complete your program in alignment with the program length, you could lose legacy status before you complete the program. For example, if it is a two-year program, and you are currently in year two but need to take another year to finish, you would lose eligibility for year three.
No. If you change your program of study from undergraduate to graduate, legacy provisions expire.
As of now, the Public Service Loan Forgiveness Program is still available for qualifying legacy borrowers; it is not an option with private loan borrowing.
Legacy provisions for loan limits: As long as you maintain eligibility to borrow under the legacy provisions, you will be eligible to borrow federal Direct Loans under the prior limits. For example, a student who previously only borrowed unsubsidized loans may still take out a Grad PLUS loan, if eligible, if they have maintained their legacy status.
Legacy loan repayment plans: Note that there are also “legacy plans” that apply to repayment plans. With legacy repayment plans, if you take out a new federal student loan after July 1, 2026, you will no longer be eligible to repay that loan under the legacy repayment plan. However, students can continue to borrow under the previous limits if you qualify for the interim exception from the new loan limits.
Alternative options and appeals
Students can explore private/alternative loans and other financing options. For graduate students, it is also recommended to check for fellowships or scholarships offered directly through your specific graduate department.
You can start reviewing options and applying now. While some lenders provide an immediate response, it can take roughly 10 days to a few weeks for the full processing and disbursement.
Yes, Berkeley offers an Economic Hardship Appeal. While this cannot change federal loan rules, the office can review your specific financial situation to see if adjustments to your awards are appropriate.