By Andrew Myers, Esquire
The One Big Beautiful Bill Act (OBBBA) has created a significant financial hurdle for many undergraduate and graduate students across the country, due to its new regulations on student loan caps, reduction of student loan repayment options, and increased reporting and compliance requirements for institutions of higher education.
Starting July 1, 2026, these new measures will take effect and change the landscape of the student loan market. One significant change created by OBBBA is the limitation on the total amount of federal student aid that both undergraduate and graduate students can obtain, which may prevent students from covering their full cost of attendance through these federal student loans. As a result, students may be forced to look to the private loan market for supplemental loans, or they may have to reconsider whether they can even afford to attend college or graduate school at all.
Many universities already offer private student loans but will begin to place a larger emphasis on these loans to ensure their students are fully supported. Two primary methods for supplementing students’ loans are through (1) preferred lending and (2) institutional lending. Under the preferred lending model, universities collaborate with private lenders to ensure certain quality private lenders are available for students. Under the institutional lending model, universities directly provide private student loans to students. However, the private student loan market is complex with many regulatory hurdles, and both methods for offering private student loans to students require strict compliance with state and federal law.
Panza Maurer is a leading law firm in higher education, administrative, and regulatory law and is constantly navigating the ever-changing landscape of higher education. Through our 50 years of experience, we have been supporting universities across many areas of law. If you have any questions or would like more information, please contact Panza Maurer.
Disclaimer: The information contained in these Client Alerts is provided for general informational purposes only and does not constitute legal advice or create an attorney-client relationship. Readers should not act or rely on any information contained herein without consulting qualified legal counsel regarding their specific circumstances.
