President Donald Trump’s One, Big, Beautiful Bill Act, enacted in July of 2025, has a big impact on federal student loans, including new caps and replacements for income-driven repayment plans. At a webinar on Tuesday, the Office of Financial Aid broke down just how the new bill will impact Tulane students.
The OBBBA limits how much parents can borrow in Direct Parent (PLUS) Loans for undergraduate students. The new regulations state that parents may borrow up to $20,000 per year per dependent student, with an aggregate limit of $65,000.
“Most undergraduate programs at universities [take] four years,” Joseph Gonzales, university financial aid associate vice president, said. “So what is likely to happen … is it’s going to shift borrowers into the private loan market … there are a lot of private lenders who are ramping up and trying to create loan programs and products that can address these gaps.”
These limits will not be implemented until July of this year, so students who enroll before then are not bound by these new regulations, as long as they remain enrolled in the same program of study.
New in the OBBBA are loan repayment options, consolidated into the standard 10 to 25-year fixed plan and the new Repayment Assistance Plan. A main component of RAP is that if a monthly payment does not reduce the loan’s principal by at least $50, the U.S. Department of Education will contribute to ensure that it does.
“There are pros and cons associated with this plan,” Gonzales said. “Some borrowers may face higher monthly payments with a longer path to forgiveness. But the plan’s structure will also cancel unpaid interest and guarantee principal reduction.”
The OBBBA also changes Federal Pell Grant eligibility. If a student is awarded any kind of financial assistance, including merit aid or outside scholarship that is equal to their cost of attendance, they are no longer eligible for a Pell Grant.
To avoid disqualifying a student from a Pell Grant, “[Tulane] can reduce the non-federal grant or scholarship until it does not equal or exceed the student’s cost of attendance,” Gonzales said. “However, there are some programs, especially in athletics … that we are not able to reduce the amount of aid. The amount is set, and it needs to be that amount for the student to retain any of that award.”
There are many questions left to be answered by the U.S. Department of Education during the public comment period, and the exact implementation method expected of institutions is still largely up in the air, but the department is expected to release clarifications on or around March 2.
The full recording and presentation from this meeting are available on the Tulane Office of Financial Aid website.