OB3/OBBBA Federal Student Loan Changes
Important Notice
Federal student loan rules are changing beginning July 1, 2026, under the One Big Beautiful Bill Act, also referred to as OBBBA or OB3. These changes affect federal borrowing limits and the availability of Graduate PLUS Loans for students enrolled in professional degree programs, including the Doctor of Medicine program.
This information applies to U.S. federal student aid borrowers enrolled in the MD program at Saba University School of Medicine.
Students should review the section that applies to them and contact the Office of Financial Aid before making decisions about borrowing, enrollment changes, leave of absence, withdrawal, clinical scheduling, USMLE Step study, private loans or payment arrangements.
Federal student loan eligibility is determined only after the Office of Financial Aid reviews the student’s individual record. This review may include enrollment status, academic status, program status, prior borrowing, Cost of Attendance, Satisfactory Academic Progress, aggregate loan usage, lifetime loan usage and other federal eligibility requirements.
The school cannot guarantee a specific loan amount, Graduate PLUS Loan eligibility, continuing-borrower exception status, private-loan approval, disbursement timing or full balance coverage before that review is complete.
What Is Changing?
The OBBBA changed the federal student loan program for graduate and professional students. The most important changes for MD students are:
- Graduate PLUS Loans will end for new borrowers beginning July 1, 2026.
- New annual and aggregate borrowing limits apply to students subject to the new professional-student loan rules.
- A new lifetime federal student-loan limit applies.
- Some continuing students may be eligible for a temporary continuing-borrower exception.
Please note: Federal loans may not cover the full Cost of Attendance or the student account balance.
How the MD Program Is Classified
The Doctor of Medicine program is classified as a professional degree program under federal rules. This classification matters because professional students have a higher annual Direct Unsubsidized Loan limit than other graduate students.
For MD students subject to the new OBBBA loan limits, the federal loan limits are:
| Loan Limit Type | Amount |
|---|---|
| Annual Direct Unsubsidized Loan limit | $50,000 per academic year |
| Graduate/professional aggregate limit | $200,000 |
| Lifetime maximum aggregate federal student loan limit | $257,500 |
The $50,000 annual limit is not a guaranteed award amount. Actual eligibility may be lower based on Cost of Attendance, enrollment status, other financial assistance, prior federal borrowing, aggregate limits, lifetime limits, Satisfactory Academic Progress, and other federal eligibility requirements.
Federal Aid Available for the MD Program
For students subject to the new OBBBA loan rules, federal aid for the MD program generally consists of Federal Direct Unsubsidized Loans.
Graduate PLUS Loans are not available to new borrowers who are subject to the new OBBBA loan rules.
Eligible continuing borrowers may remain eligible for Graduate PLUS Loans during the applicable continuing-borrower exception period.
Two Borrower Groups Beginning July 1, 2026
Beginning July 1, 2026, MD students generally fall into one of two federal loan categories:
- New and incoming federal loan borrowers are subject to the new professional-student loan limits.
- Continuing federal loan borrowers who may qualify for the continuing-borrower exception.
Track 1: New and Incoming Federal Loan Borrowers
This section applies to students who first borrow federal student loans for their current MD program on or after July 1, 2026.
What You Need to Know
Your MD program is a professional program. If you meet all federal eligibility requirements, you may be considered for up to $50,000 per academic year in Federal Direct Unsubsidized Loans.
Graduate PLUS Loans are not available to new borrowers and are subject to the new OBBBA loan rules.
Federal loans alone may not cover the full cost of your medical education. You should plan early for the difference between your federal loan eligibility and your total educational costs.
Understanding Your Funding Gap
The Cost of Attendance is the estimated cost used to determine financial aid eligibility. It may include tuition, fees, books, supplies, transportation, housing and food, personal expenses, applicable loan fees and other allowable educational expenses.
The Cost of Attendance is not the same as the amount you owe the school. It also does not guarantee that federal loans will cover all costs.
Because the new professional-student federal loan limits are fixed, students may have a funding gap between available federal loans and total educational costs.
| Saba University School of Medicine’s Example for Planning Purposes | Amount |
|---|---|
| Total estimated Cost of Attendance for the MD program | $481,803 |
| Maximum graduate/professional Direct Unsubsidized Loan eligibility | $200,000 |
| The estimated amount the student must plan for from other sources | $281,803 |
This example is for planning only. Your actual eligibility may be lower based on prior borrowing, enrollment status, Cost of Attendance, lifetime limits, other aid, Satisfactory Academic Progress, and other federal requirements.
Steps for New and Incoming Students
- File the FAFSA.
- Review your school’s published Cost of Attendance.
- Review your federal loan history.
- Pursue scholarships and gift aid first.
- Use your available Federal Direct Unsubsidized Loan eligibility before considering private education loans.
- Plan early for any remaining balance or living-expense gap.
- Contact the Office of Financial Aid before applying for a private education loan.
- Confirm that any private lender you consider will approve loans for students attending your school.
Track 2: Continuing Federal Loan Borrowers
This section applies to students who received a Federal Direct Loan for their current MD program prior to July 1, 2026.
Some continuing students may qualify for the federal continuing-borrower exception. This exception may allow eligible students to continue borrowing under the prior federal loan rules for a limited period.
What You Need to Know
You may qualify for the continuing-borrower exception if you received a Federal Direct Loan for your current MD program before July 1, 2026, and you remain enrolled in the same MD program.
For this purpose, a Federal Direct Loan may include a Direct Unsubsidized Loan or a Graduate PLUS Loan. The key issue is whether a Direct Loan was received for the current MD program before July 1, 2026.
If you qualify, you may continue under the prior loan rules for the lesser of:
- Three academic years, or
- The remaining time is expected to complete your program.
During the applicable exception period, eligible continuing borrowers may remain eligible for Graduate PLUS Loans, subject to Cost of Attendance, credit approval, other financial assistance, aggregate and lifetime limits, and all other federal eligibility requirements.
Continuing-Borrower Status Is Not Automatic
The Office of Financial Aid must review your record before confirming your eligibility for the continuing-borrower exception.
This review may include:
- Whether you were enrolled in the same MD program before July 1, 2026.
- Whether you received a Federal Direct Loan for that program before July 1, 2026.
- Your program status.
- Your enrollment history.
- Your expected time to credential.
- Your federal loan usage.
- Your Satisfactory Academic Progress status.
- Any leave, withdrawal, transfer or break in enrollment.
How Long Does the Exception Last
Continuing-borrower/legacy-borrowing eligibility is limited. It generally lasts for the lesser of three academic years or the remaining time expected to complete the program.
When the exception period ends, or when the student completes the program, the new annual, aggregate and lifetime limits apply to any further federal borrowing.
How Continuing-Borrower Protection May Be Affected
Continuing-borrower protection may be affected if you withdraw, transfer, change programs, change degree levels or have a break in enrollment that affects your federal enrollment status.
Students should contact the Office of Financial Aid before requesting or finalizing:
- A leave of absence.
- A withdrawal.
- A clinical pause.
- A transfer.
- A program change.
- A reduced course load.
- A Step study period.
- A vacation or a gap between academic or clinical activity.
Do not assume the continuing-borrower exception will pause and resume. A change in enrollment or program status may affect eligibility for future federal loans.
Steps for Continuing Students
- Contact the Office of Financial Aid before making enrollment or program changes.
- Confirm whether your record qualifies for the continuing-borrower exception.
- Review how long your exception period may last.
- Review your remaining federal loan eligibility.
- Ask Financial Aid how a leave, withdrawal, clinical gap, USMLE Step study period or reduced course load may affect your eligibility.
- Plan early for any future funding gap if your exception period ends before program completion.
Leave of Absence, Withdrawal, and Breaks in Enrollment
A leave of absence, withdrawal, clinical interruption, vacation period or enrollment gap may affect eligibility for federal student aid, loan repayment status, enrollment reporting and eligibility for the continuing-borrower exception.
Some leaves may be treated differently based on school policy and federal Title IV requirements. Students should contact the Office of Financial Aid before requesting a leave, withdrawal, clinical pause or any other break in enrollment.
Before the student acts, the Office of Financial Aid will explain how the decision may affect current aid, future aid, disbursement eligibility, repayment status and continuing-borrower protection.
Enrollment Status and Federal Loan Eligibility
Federal student loan eligibility may change if your enrollment status changes. Students must generally be enrolled at least half-time to receive Direct Loan funds.
For financial aid purposes, enrollment status is determined as follows:
| Enrollment Status | Credit Load |
|---|---|
| Full-time | 8 or more credits |
| At least half-time | 4 to 7 credits |
| Less than half-time | 1 to 3 credits |
| Not enrolled | 0 credits |
Dropping below full-time may reduce your eligibility for federal loans. Dropping below half-time may prevent the Direct Loan from being disbursed.
Beginning July 1, 2026, annual loan limits for term-based programs may be reduced in proportion to enrollment status when a student is enrolled less than full-time.
Students should contact the Office of Financial Aid before dropping courses, changing schedules, taking a leave, withdrawing or entering a clinical or academic gap.
Clinical Medicine, Rotations, Step Study and Gaps
Clinical Medicine enrollment must be supported by official school records. A student account charge or clinical tuition charge alone does not determine federal loan eligibility.
The Office of Financial Aid may need to review:
- Registrar enrollment records.
- Clinical Education records.
- Approved rotation schedules.
- Clinical start and end dates.
- Scheduled breaks.
- Placement delays.
- Step study periods.
- Student account charges.
- Program status.
- Whether the period is part of an eligible payment period.
A clinical gap, placement delay, vacation period, Step study period, or non-credit exam-prep period may affect eligibility for federal loans. Students should contact the Office of Financial Aid before relying on federal aid during any period when they are not actively enrolled in eligible coursework or approved clinical activity.
Satisfactory Academic Progress
Students must meet Satisfactory Academic Progress (SAP) to remain eligible for federal student aid.
SAP may include academic performance, pace of progression, maximum timeframe, program progression and other school requirements. Failure to meet SAP may result in the loss of eligibility for federal aid, even if the student has remaining annual, aggregate or lifetime loan eligibility.
Students should review the school’s SAP policy and contact the Office of Financial Aid with any questions about how SAP may affect federal loan eligibility.
Private Education Loans
Students who cannot cover educational costs through federal loans, scholarships, personal resources, payment arrangements or other funding sources may consider private education loans.
Private education loans are not federal student loans. They may have different interest rates, credit and cosigner requirements, repayment terms, deferment options, borrower protections and forgiveness options.
Students may qualify for federal student loans, and their terms and conditions may be more favorable than those of private education loans.
The school does not guarantee private-loan approval. Students may use any lender that approves and certifies a private education loan for attendance at the school, subject to the school’s certification and applicable Cost of Attendance limits.
Before applying, confirm that the lender will approve loans for students at your school. Not all private lenders serve international medical schools.
Quick Reference: Federal Loan Limits for MD Students
Effective for federal loans borrowed for periods of enrollment beginning on or after July 1, 2026.
| Item | MD Professional Student |
|---|---|
| Annual Direct Unsubsidized Loan limit | $50,000 |
| Graduate/professional aggregate limit | $200,000 |
| Lifetime maximum aggregate federal student loan limit | $257,500 |
| Graduate PLUS Loan for new borrowers | Not available |
| Federal loan type for new borrowers | Direct Unsubsidized Loan |
| Graduate PLUS Loan for eligible continuing borrowers | May remain available during the applicable exception period |
Frequently Asked Questions (Q&A)
Yes. The Doctor of Medicine (MD) program is classified as a professional degree program under federal rules.
For professional students subject to the new OBBBA loan limits, the annual Federal Direct Unsubsidized Loan limit is $50,000 per academic year, subject to Cost of Attendance and all other eligibility requirements.
The graduate/professional aggregate limit is $200,000. This limit applies to graduate and professional borrowing.
The lifetime maximum aggregate federal student loan limit is $257,500. This limit may affect future federal loan eligibility, depending on the student’s federal borrowing history.
Graduate PLUS Loans are not available to new borrowers who are subject to the new OBBBA loan limits beginning July 1, 2026. Eligible continuing borrowers may remain eligible for Graduate PLUS Loans during the applicable continuing-borrower exception period.
For new MD borrowers subject to the OBBBA loan rules, federal aid generally consists of Federal Direct Unsubsidized Loans. Graduate PLUS Loans are not available to new borrowers under the new rules.
No. The Office of Financial Aid must review your record to determine whether you qualify for the continuing-borrower exception.
For continuing-borrower review, the key issue is whether you received a Federal Direct Loan for your current MD program before July 1, 2026. This may include a Direct Unsubsidized Loan or a Graduate PLUS Loan.
If you qualify, the exception generally lasts for the lesser of three academic years or the remaining time expected to complete your program.
Students should contact the Office of Financial Aid for individual review. Federal rules generally apply based on the student’s eligibility category and do not allow the school to award based only on student preference.
Not necessarily. Federal loan eligibility may be less than the Cost of Attendance due to annual, aggregate, and lifetime limits; prior borrowing; enrollment status; other aid; SAP; and other federal requirements.
Not necessarily. A student account balance does not determine federal loan eligibility. The Office of Financial Aid must confirm eligibility before aid can be awarded or disbursed.
Your loan eligibility may be reduced. Students must generally be enrolled at least half-time to receive Direct Loan funds. Contact the Office of Financial Aid before dropping courses or reducing credits.
Not automatically. Step study and exam-prep periods must be reviewed to determine whether they fall within an eligible payment period and are supported by enrollment and academic records.
Not automatically. Clinical gaps, placement delays, vacation periods, and breaks must be reviewed using Registrar, Clinical Education, billing, and academic records.
Yes. The FAFSA remains the starting point for Federal Direct Unsubsidized Loan eligibility and may also be used for scholarship review.
Contact the Office of Financial Aid first. Private education loans may help with funding gaps, but terms vary by lender, and not every lender serves international medical schools.
Who to Contact
Contact the Office of Financial Aid for questions about:
- OBBBA or OB3.
- Federal loan eligibility.
- Direct Unsubsidized Loans.
- Graduate PLUS Loan eligibility.
- Continuing-borrower exception review.
- FAFSA.
- Private loan certification.
- Aid disbursement eligibility.
Contact Student Accounts for questions about:
- Tuition and fees.
- Student balances.
- Payment deadlines.
- Refunds.
- Payment arrangements.
Contact the Registrar for questions about:
- Enrollment status.
- Academic status.
- Leaves of absence.
- Withdrawal.
- Official academic records.
Contact Clinical Education for questions about:
- Clinical rotations.
- Clinical schedules.
- Placement status.
- Approved clinical activity.
Final Reminder
Federal student aid eligibility is student-specific. Students should not rely on general information on websites alone when making decisions about borrowing, enrollment, leave, withdrawal, clinical, or private loans.
Contact the Office of Financial Aid before taking any action that may affect your federal loan eligibility.
This information reflects federal guidance as of June 13, 2026. Federal implementation guidance may change. The Office of Financial Aid will update this page as additional guidance is confirmed.
Example for Planning Purposes
Because the new professional-student federal loan limits are fixed, students may face a funding gap between the federal loans available to them and their total educational costs. The example below are for planning purposes only and are based on the published 2026–27 estimated Cost of Attendance for new MD students matriculating on or after September 2026.
| Saba University School of Medicine’s Example for Planning Purposes | Amount |
|---|---|
| Total estimated Cost of Attendance for the MD program | $481,803 |
| Maximum graduate/professional Direct Unsubsidized Loan eligibility | $200,000 |
| The estimated amount the student must plan for from other sources | $281,803 |
This example is for planning purposes only. Actual eligibility may be lower based on enrollment status, Cost of Attendance, lifetime limits, other financial assistance, Satisfactory Academic Progress, and other federal requirements.