OB3 Federal Student Loan Changes
Last reviewed and updated: July 21, 2026.
Important Notice
Effective July 1, 2026, federal student loan rules changed under the Working Families Tax Cuts Act, formerly known as the One Big Beautiful Bill Act (OBBBA). These changes affect federal borrowing limits, the availability of Graduate PLUS Loans, and repayment options for students enrolled in professional degree programs, including the Doctor of Medicine program.
Federal loan eligibility is determined only after the Office of Financial Aid reviews your individual record. That review may include enrollment status, academic and program status, prior borrowing, Cost of Attendance, Satisfactory Academic Progress, and aggregate and lifetime loan usage. The school cannot guarantee a specific loan amount, Graduate PLUS eligibility, continuing-borrower status, private loan approval, disbursement timing, or full balance coverage until that review is complete.
Contact the Office of Financial Aid before making decisions about borrowing, enrollment changes, a leave of absence, withdrawal, clinical scheduling, USMLE Step study, private loans or payment arrangements. This applies to all information below.
Federal Loan Limits Effective July 1, 2026
The MD program is classified as a professional degree program under federal rules. The federal loan limits that apply to a student depend on whether the student qualifies for the federal interim exception. The Office of Financial Aid must review and confirm each student’s borrower category.
| Item | Borrower Eligible for the Federal Interim Exception | Borrower Subject to the New Professional-Student Loan Limits |
| Who this applies to | You qualify for the federal interim exception if, as of June 30, 2026, you were enrolled in the applicable SUSOM MD program and had a Federal Direct Loan disbursed for that program before July 1, 2026. This eligibility applies only during your remaining expected time to credential. | You do not qualify for the federal interim exception and receive a loan for the MD program with an earliest disbursement date on or after July 1, 2026. |
| Annual Direct Unsubsidized Loan limit | $20,500 | Up to $50,000 |
| Aggregate Subsidized and Unsubsidized Loan limit | $138,500, including loans received for undergraduate study | $200,000 in Subsidized and Unsubsidized Loans received as a graduate or professional student. Undergraduate loans and Graduate PLUS Loans are not included in this $200,000 aggregate limit. |
| Graduate PLUS Loans | May remain available during the applicable interim-exception period, up to the Cost of Attendance minus other financial assistance, subject to credit approval and all other federal eligibility requirements | Not available |
| Lifetime Maximum for Applicable Federal Student Loans | The $257,500 lifetime maximum does not apply while you remain eligible for the interim exception. After the exception ends, the $257,500 lifetime maximum applies, and applicable loans previously received, including Graduate PLUS Loans received during the exception period, are included in the calculation. | $257,500, including applicable federal loans received for undergraduate, graduate, and professional study |
These amounts are federal maximums and are not guaranteed awards. Your actual eligibility may be lower based on your Cost of Attendance, enrollment status, other financial assistance, prior borrowing, applicable aggregate and lifetime limits, Satisfactory Academic Progress, and other federal eligibility requirements.
Students who qualify for the federal interim exception cannot opt out of the exception to receive the new $50,000 annual professional-student loan limit. However, a student may always choose to borrow less than the amount offered.
Track 1: Borrowers Subject to the New Professional-Student Loan Limits
If you do not qualify for the federal interim exception, you are subject to the new professional-student loan limits. You may be eligible for up to $50,000 per academic year in Federal Direct Unsubsidized Loans, subject to the $200,000 graduate and professional aggregate limit, the $257,500 lifetime maximum, your Cost of Attendance, prior borrowing, enrollment status, other financial assistance, and all other federal eligibility requirements. Borrowers in this category are ineligible for Graduate PLUS Loans.
Understanding your funding gap
The Cost of Attendance is the estimated cost used to determine your financial aid eligibility. It includes direct and indirect costs.
Direct costs are charges billed to your student account by SUSOM, such as tuition and fees.
Indirect costs are estimated expenses you pay yourself that SUSOM does not bill for, including books, course materials, supplies and equipment, transportation, housing, food, miscellaneous personal expenses, and applicable federal loan fees.
Because the Cost of Attendance includes indirect costs, it is higher than the balance you owe the school. Federal loan funds are applied first to your SUSOM charges, and any remaining funds are refunded to you to cover indirect costs. Because federal limits are fixed, you may have a gap between your available federal loans and your total educational costs.
| Example for Planning Purposes | Amount |
|---|---|
| Total estimated Cost of Attendance for the MD program | $481,803 |
| Maximum possible professional Direct Unsubsidized Loan eligibility for a borrower with no prior graduate or professional borrowing on Subsidized or Unsubsidized Loans | $200,000 |
| Estimated amount to plan for from other sources | $281,803 |
This example uses SUSOM’s published 2026–2027 estimated Cost of Attendance for new MD students matriculating on or after September 2026 and is provided for general planning purposes only. The example assumes the student has no prior graduate or professional Subsidized or Unsubsidized Loan borrowing and remains otherwise eligible for the maximum federal amount. Actual eligibility may be substantially lower. Cost of Attendance and federal loan amounts are reviewed annually and may change.
Steps to take
- Complete the FAFSA.
- Review SUSOM’s published Cost of Attendance and your federal loan history.
- Pursue scholarships and gift aid before taking out a loan.
- Plan early for the gap between your federal eligibility and your total costs.
Track 2: Borrowers Eligible for the Federal Interim Exception (Continuing Students)
You may qualify for the federal interim exception only if you were enrolled in the applicable SUSOM MD program as of June 30, 2026, and had a Federal Direct Loan disbursed for that program before July 1, 2026. The qualifying loan may be a Direct Unsubsidized Loan or a Graduate PLUS Loan; you were not required to have previously received a Graduate PLUS Loan.
Your status is not automatic. The Office of Financial Aid must review your enrollment, program, and federal loan records to confirm your eligibility.
The exception is time-limited. Your expected time to credential is the lesser of:
- Three academic years; or
- The difference between SUSOM’s published length of the MD program and the portion of the program you completed before July 1, 2026.
Your expected time to credentialing period begins July 1, 2026, and may end before your anticipated graduation date. The exception cannot be extended merely because you need additional time to complete the program.
You must remain enrolled in the same program of study. Withdrawing from or otherwise ceasing enrollment in the applicable program may end your eligibility for the interim exception. An approved Title IV leave of absence may be treated differently under federal requirements and SUSOM policy. Contact the Office
Steps to take
- Ask the Office of Financial Aid to confirm whether your record qualifies.
- Review how long your exception period may last and your remaining eligibility.
- Plan early for a funding gap if your exception ends before you complete the program.
Enrollment Changes That Affect Federal Aid
You must generally be enrolled at least half-time to receive Direct Loan funds.
| 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 annual loan eligibility under the federal schedule of reductions, and dropping below half-time will generally prevent a new Direct Loan disbursement. Beginning with the 2026–2027 award year, the federal schedule of reductions must be applied to students enrolled less than full-time when applicable, including borrowers eligible for the federal interim exception.
A leave of absence, withdrawal, transfer, program or degree-level change, clinical interruption, placement delay, vacation period, USMLE Step study period, or other gap may affect your current and future aid, eligibility for disbursement, loan repayment status, enrollment reporting, and continuing-borrower protection. Some leaves are treated differently under school policy and federal Title IV requirements.
Clinical Medicine enrollment must be supported by official school records. A clinical tuition charge alone does not establish eligibility. The Office of Financial Aid may need to review Registrar and Clinical Education records, approved rotation schedules, clinical start and end dates, scheduled breaks, and whether the period falls within an eligible payment period.
You must also meet Satisfactory Academic Progress. Failure to meet SAP may end your eligibility, even if you have remaining annual, aggregate, or lifetime loan eligibility. See Student Consumer Information for SUSOM’s SAP policy.
Contact the Office of Financial Aid before requesting or finalizing any of these changes. We will explain how the decision affects your current aid, future aid, eligibility for disbursement, repayment status, and continuing-borrower protection before you act.
How the Changes Affect Repayment
This is important if you are a borrower eligible for the federal interim exception and are deciding whether to accept an additional Federal Direct Loan disbursement on or after July 1, 2026. Receiving a new Direct Loan may change the repayment plans available for your eligible Direct Loans once those loans enter or remain in repayment. It does not immediately refinance, consolidate, or transfer your existing loan balance into a new loan.
Before accepting additional federal loan funds, review the available Federal Student Loan Repayment Plans and use the Federal Student Aid Repayment Calculator to compare your estimated monthly payments, repayment periods, and total repayment amounts across the available plans. You may also contact your federal loan servicer for information specific to your existing loans.
Private Education Loans
If federal loans, scholarships, and personal resources do not cover your costs, a private education loan may help close the gap. Private loans are not federal student loans and typically do not offer the same borrower protections. For full details, including how to compare lenders and the self-certification requirement, see Private Education Loan Options on our U.S. Financial Aid page.
Frequently Asked Questions
No. If you qualify for the federal interim exception, you cannot opt out of it to receive the new annual limit. You may always choose to borrow less than the amount offered.
No. You may accept less than the amount offered and request additional funds later, as long as you remain eligible. Borrow only what you need.
Not necessarily. Federal eligibility may be lower than your costs, and your account balance does not determine your loan eligibility.
Yes. You must complete the FAFSA for the applicable award year to be considered for Federal Direct Loan eligibility. The Office of Financial Aid may also request additional documentation before determining your eligibility.
- Office of Financial Aid: federal student loan change questions, federal loan eligibility, Direct Unsubsidized Loans, Graduate PLUS eligibility, federal interim-exception review, FAFSA, private loan certification, disbursement eligibility.
- Student Accounts: tuition and fees, student balances, payment deadlines, refunds, payment arrangements.
- Registrar: enrollment status, academic status, leaves of absence, withdrawal, official academic records.
- Clinical Education: clinical rotations, clinical schedules, placement status, approved clinical activity.
Last reviewed and updated: July 21, 2026. Federal student aid requirements and Department of Education guidance may change. Eligibility is determined on a case-by-case basis, and students should not rely solely on general website information when making decisions that may affect their enrollment, borrowing, or eligibility for federal student aid.