One Big Beautiful Bill Act (OBBBA): 4 Steps in the Right Direction

Financial aid administrators are used to working under pressure, adjusting policies as required and pulling everything together in a timely manner. Yet accomplishing all of that is proving to be more challenging than normal regarding updates sparked by the One Big Beautiful Bill Act (OBBBA).

This is particularly due to the timing delays associated with receiving federal guidance and change requirements falling far outside the standard eight-month development period where final rules are normally set by November 1 to allow for smooth implementation by the following July 1. OBBBA has numerous provisions requiring a July 1 launch, but which have just had final rules established within the past month. 

This is perhaps the most difficult operational environment financial aid administrators have faced. They are struggling with how to give solid answers when rules are not fully established, systems need time to be updated, and students are reaching out about funding. Many schools believe they must wait to begin disbursing any 2026–2027-year aid—or in some cases even attempting to process loans for future disbursements—until all rules are set and systems are fully updated, installed, and tested. Being forced into such a situation is making stress levels rise within the Financial Aid and Student Account Offices and causing student conversations to be less fruitful than anyone wants.

STEP 1: WHAT YOU CAN DO TODAY

One step schools can take to move some student aid processing forward is to identify the students who qualify for exceptions to the changes. While limited in number, these may be processed using already established practices. Students who qualify for exceptions to the new federal student loan limit rules include the following.

Undergraduate students and parent PLUS borrowers if they…

• Were enrolled as of June 30, 2026;
• Received at least one Direct Loan, or the parent received a Direct PLUS Loan disbursement on the student’s behalf, for such a program of study before July 1, 2026;
• And are enrolled at the same institution, seeking the same credential after July 1, 2026, and have not ceased to be enrolled seeking the same credential at the same institution. (Here “credential” refers to the degree you are seeking, like an associate or bachelor’s degree. To qualify, students may change majors within their credential level, but cannot change the level itself.)

Graduate and Professional Students qualify under the limited exception only if they…

• Were enrolled in a program of study at an institution as of June 30, 2026;
• Received at least one Direct Loan for such program of study prior to July 1, 2026;
• And are currently enrolled at the same institution in the same program of study and have not ceased to be enrolled in the same program at the same institution at any point on or after July 1, 2026.

As the rules and loan limits have not changed for these students, it may be possible to process their aid now, helping them to move forward with their educational plans and free up some additional time for you when the crunch period begins that will come when all your systems are updated.

STEP 2: ENLIGHTEN YOUR GRAD STUDENTS

There could be benefit in notifying your current graduate student population about their exception rules. For those summer enrollees who have not yet borrowed, being aware of the Graduate PLUS Loan prior to borrower exception could spark them to choose to take a small loan before July 1, 2026, to preserve this funding source as an option for them later on.

Here’s a suggested message:

“We want you to have all the funding options possible. While we do not encourage taking on debt, if you do need to borrow to pay for school now, or will likely need to, we want you to be aware of a significant change coming soon. 

One traditional tool, the federal Grad PLUS Loan, is being phased out effective July 1, 2026. However, there is an exception for graduate students who have borrowed either a federal Grad PLUS or Direct Unsubsidized Loan by June 30, 2026. These students may continue to have the Grad PLUS Loan as a funding option through either June 30, 2029, or the end of their current academic program, whichever comes first. Talk to our Financial Aid team right away if you want to borrow a small loan now to preserve this option for continued use later.”

STEP 3: EXPLAIN THE TIMING SITUATION PROACTIVELY

Proactive communications to your students clearly explaining the timing situation being created by the late issuance of federal guidance, helping to clarify the tasks needed to establish appropriate processing, and assuring them you are taking all steps possible to help them continue to afford their education in a timely manner could be well received. 

STEP 4: ANTICIPATE HIGHER NEED FOR EMERGENCY FUNDING

Some schools plan to focus their institutional emergency aid programs more toward students who will be delayed in receiving funding needed for rent and other indirect educational costs during this time. Any opportunity an institution has to expand such emergency aid programs will make a positive difference for students’ immediate needs and likely will help retention.

Hopefully some wins can be had from helping all those you can now while having to wait to fully serve the masses!

About the Author
Thomas Ratliff has over 35 years of higher education experience, teaming with peers to serve students at private, public, and proprietary institutions. He has worked with traditional and nontraditional populations pursuing certificate programs through doctoral degrees within term-based, non-term, and nonstandard term academic calendars. He has been blessed with a variety of experiences that help him relate to the partner school’s challenges.  

Thomas has made presenting at conferences a staple of his career, as it helps his colleagues expand their understanding and instill the ideas in their hearts. He has also enjoyed serving financial aid communities through a variety of leadership roles, including as President of four professional associations: ISFAA (Indiana), TASFAA (Texas), MASFAA (Midwest), and SWASFAA (Southwest). When taking a break from helping schools excel, Thomas cherishes life with his family and enjoys autocross racing his 1965 Chevrolet Corvair.