Education Department Proposes RISE Committee Rules on Loan Limits and Repayment Plans

The U.S. Department of Education (ED) on January 30, 2026, published a notice of proposed rulemaking (NPRM) to implement certain changes in connection with the One Big Beautiful Bill Act (OBBB), including adjustments to federal student loan borrowing limits, repayment plans and other conforming changes. The NPRM follows ED's negotiated rulemaking hearings on this topic, which took place in fall 2025. ED is accepting public comments on the proposal through March 2, 2026.

Background

OBBB was enacted on July 4, 2025, and included several key changes to the federal student aid programs. (See Holland & Knight's comprehensive OBBB analysis.) Notably, the changes include eliminating the Graduate PLUS loan program, establishing annual and aggregate loan limits for student and parent borrowers, and streamlining student loan repayment plan options. To implement these changes, ED initiated its rulemaking process in fall 2025.

ED is required to use negotiated rulemaking for most changes to its federal student aid program regulations, which includes convening negotiating committees of qualified negotiators to discuss the rule package, with the goal of reaching consensus on the proposed regulatory language. Following OBBB's enactment, ED established two negotiated rulemaking committees: Reimagining and Improving Student Education (RISE) and the Accountability in Higher Education and Access through Demand-driven Workforce Pell (AHEAD). Both committees were tasked with drafting regulations to implement different sections of OBBB, and both committees ultimately reached consensus on their rule proposals.

The NPRM includes the RISE committee's proposal. The AHEAD committee's proposed rule is expected in the coming weeks.

RISE Proposed Rule

The RISE NPRM includes the following key changes:

• Loan Repayment Plan Options. The NPRM implements the two new student loan repayment plan options established by OBBB and sunsets the previous repayment plans, including SAVE and REPAYE. For loans disbursed on or after July 1, 2026, borrowers may elect only the standard repayment plan, known as "Tiered Standard," or the income-based Repayment Assistance Plan, known as "RAP."
• Borrowing Limits for Graduate and Professional Programs. OBBB imposes new annual and aggregate borrowing limits for graduate and professional students and parent borrowers. Beginning July 1, 2026, professional students are permitted to borrow up to $50,000 annually and $200,000 in a lifetime, compared to graduate students who can borrow up to $20,500 annually and $100,000 in a lifetime. Parents may borrow up to $20,000 annually and $65,000 in a lifetime per dependent student.

OBBB relies on ED's regulatory definition of "professional student" at 34 C.F.R. § 600.2 to determine whether students are classified as graduate or professional. Therefore, to implement these changes, the NPRM amends the regulatory definition of "professional student."

Under the RISE committee's proposal, professional students include, in addition to students enrolled in the programs listed in the regulation, students enrolled in any program that 1) signifies the completion of academic requirements for beginning practice in a given profession and a level of professional skill beyond normally required for a bachelor's degree, 2) is generally at the doctoral level and requires at least six academic years of postsecondary education coursework for completion, including at least two years of post-baccalaureate level coursework, 3) generally requires professional licensure to begin practice and 4) includes a four-digit program Classification of Instructional Programs (CIP) code in the same intermediate group as the programs specifically listed in the regulation.

The NPRM also specifies a formula for pro-rating loan limits for less than full-time attendance and allows institutions to impose loan limits at the institution level, as long as they are applied equally to all students and satisfy certain documentation requirements.

• Grad PLUS Phaseout and Transition Period for New Loan Limits. Because OBBB eliminated the Graduate PLUS loan program, graduate and professional students will transition to the Direct Loan program. The NPRM provides a transition period for students who are already enrolled and borrowing and makes technical and conforming adjustments to implement the transition to Direct Loans.

Students who were enrolled in their program and received a Direct Loan prior to July 1, 2026, can continue to borrow under the same prior loan terms (i.e., not subject to the new limits) during their "expected time to credential," which means the lesser of three academic years or difference between the length of the program and percentage the student already completed.

• Deferment/Forbearance and Loan Rehabilitation. The NPRM implements OBBB's elimination of economic hardship and unemployment deferments, as well as the shorter time period a borrower is allowed to remain in forbearance. The NPRM also amends ED regulations to permit two opportunities to rehabilitate defaulted student loans, as required by OBBB.

Timeline and Next Steps

ED is accepting public comments through regulations.gov until March 2, 2026. After ED reviews the public comments, it will publish the rules in final form.

This set of regulations will likely take effect July 1, 2026, in line with OBBB's effective dates for these changes. ED is typically subject to certain master calendar restrictions for its federal student aid rules, which require that rules be published in final form before November 1 to take effect the following July 1. However, ED stated in the NPRM it believes the restriction is implicitly waived by OBBB's inclusion of a July 1, 2026, effective date.

If you have any questions about this rule package or would like assistance in preparing a public comment, please contact the authors.

Information contained in this alert is for the general education and knowledge of our readers. It is not designed to be, and should not be used as, the sole source of information when analyzing and resolving a legal problem, and it should not be substituted for legal advice, which relies on a specific factual analysis. Moreover, the laws of each jurisdiction are different and are constantly changing. This information is not intended to create, and receipt of it does not constitute, an attorney-client relationship. If you have specific questions regarding a particular fact situation, we urge you to consult the authors of this publication, your Holland & Knight representative or other competent legal counsel.