A note from...
Shane Pruitt, Ed.D., Senior Consultant, Retention and Enrollment
The One Big Beautiful Bill
What We Know vs. What We Don’t
Enrollment leaders are again bracing for a massive change in the federal financial aid landscape as the One Big Beautiful Bill (OBBB) is now law. For enrollment and financial aid leaders, this is not a time to sit back and wait for details -- it’s a moment to study the contours of what is already confirmed while keeping a close eye on the many unresolved questions that could reshape strategy in the months ahead.
The legislation is broad in scope, but three areas stand out as both urgent and highly disruptive: the elimination of Grad PLUS loans, the rollout of a new repayment framework, and ongoing questions about how institutional cost of attendance interacts with accountability and aid packaging. Each will require deep analysis and, in some cases, significant changes to institutional policy and practice.
1. Loan Limits and Elimination of Grad PLUS Loans
We now know that, starting July 1, 2026, the Grad PLUS Loan program will be eliminated, while Subsidized Direct Loans for undergraduates remain in place. Graduate and professional borrowing will be limited to capped unsubsidized loans, with annual and lifetime borrowing limits set below what many graduate and professional students currently require to fund their education. For undergraduates, subsidized loans remain available; impacts for four year institutions will center more on packaging strategies and unmet need among students who rely on unsubsidized borrowing. For graduate students, the elimination of Grad PLUS removes one of the last reliable sources of federal borrowing, creating potential enrollment barriers in fields that already face workforce shortages.
Yet, the specifics of how these caps will be applied remain murky. It is unclear whether partial-year or part-time enrollment will be prorated, how quickly annual and aggregate limits might be adjusted for inflation, or whether institutions will be expected to pivot immediately to fill the gap with institutional or private financing. What is certain is that students in high-cost metro areas or in tuition-intensive programs will feel the effects first, and without thoughtful institutional intervention, the loss of these loan options could quickly translate into yield declines and increased melt among admitted students with high financial need.
How to Prepare:
- Incorporate new loan caps into predictive yield and net tuition revenue models
- Simulate enrollment outcomes under varying borrowing limits to identify the most vulnerable student segments
- Begin evaluating institutional loan, payment plan, or partnership-based financing options for programs at greatest risk
2. New Repayment Assistance Plan (RAP)
The OBBB also overhauls repayment by replacing most current income-driven repayment plans with a new Repayment Assistance Plan, or RAP. On paper, the concept of streamlining repayment options may sound simple. In practice, RAP calculates payments from adjusted gross income (AGI), with payment factors that will likely increase required monthly payments for many borrowers, particularly early in their careers. This shift could have lasting effects on alumni satisfaction, loan default risk, and even prospective student decision-making if repayment expectations are not communicated clearly during the admissions process.
What remains uncertain is how borrowers already in repayment will be moved into the new system. Will there be a gradual transition, or will all existing borrowers be required to convert to RAP or the revised Income-Based Repayment plan at a set date? Will any of the borrower protections from current plans (such as income recertification flexibility or interest subsidies) carry over? Institutions also face unanswered questions about their role in preparing students for these changes: will new federal rules require more robust repayment counseling, and if so, what form will that take?
How to Prepare:
- Review financial literacy and exit counseling content to ensure it reflects higher expected payments under RAP
- Model repayment risk for programs with graduates in lower initial earnings brackets
- Train advising and financial aid staff to communicate the distinctions between current and future repayment structures
3. Cost of Attendance (COA) Caps
In the final law, federal need analysis continues to use each institution’s published cost of attendance. Earlier proposals to replace institutional COA with a national “Median Cost of College” were not enacted. There is no new federal cap tied to a national median; however, what will pressure affordability is the interaction between unchanged COA policy and the bill’s new federal borrowing limits. Graduate and professional students, and some dependent undergraduates whose parents borrow, may reach federal loan caps before meeting COA, particularly in high-cost markets or price-intensive programs. This is not a change to COA itself; it is a consequence of tighter annual, aggregate, and lifetime borrowing limits and new Parent PLUS caps.
How to Prepare:
- Model unmet need under current COA using the enacted graduate, professional, lifetime, and Parent PLUS borrowing caps to quantify program-level risk
- Adjust packaging and communications to explain why aid may not fully align with COA even though COA policy did not change
What to Do Now
Colleges and universities that act now -- by modeling multiple aid scenarios, training staff on new borrower realities, and preparing students and families for shifts in affordability -- will be far better positioned to navigate the OBBB’s impact.
Those who wait for every implementation detail to be finalized risk being caught off guard, overexposed, and underprepared when the rules take effect. The institutions that will thrive are those that treat remaining uncertainties as a call to readiness, not a reason for delay.
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