- Changes to Federal Direct Loans
- Direct Student Loan Programs
- Direct PLUS Loan Programs
- Direct Loan Processing (How to Apply?)
- Additional Requirements
- State Educational Loans
- Private Alternative Loans
- Federal & Private Loan Disbursements
- Enrollment Status Change
- Repayment Terms & Resources
U.S. Department of Education
Federal Student Aid Changes Coming in 2026
The One Big Beautiful Bill Act (OBBBA) brings significant changes to how students and families pay for college, starting July 1, 2026. Those changes, as we currently know them, are summarized below.
As the Department of Education (ED) releases further guidance and finalizes the rules, we will continue to update this page with the most accurate and actionable information available. We understand that students, families, and others have questions, and we are here to help.
Graduate Students
What’s Changing on July 1, 2026
- Current Grad PLUS borrowers: If you have a Grad PLUS loan that is disbursed before July 1, 2026 (for academic year 2025-2026), you may keep borrowing under existing Grad PLUS Loan rules for up to 3 more academic years or until your program ends, whichever comes first.
- Prospective Graduate Students: Grad PLUS Loans will not be available starting with the 2026-2027 academic year. You will need to rely on the Federal Direct Unsubsidized Loan (within the new caps), scholarships, savings, or private loans.
- Borrowing limits will now be capped as follows:
- Graduate (unsubsidized only): $20,500 per year, up to $100,000 lifetime aggregate.
- Total lifetime borrowing limits for all federal student loans (undergraduate and graduate combined) (except Parent PLUS): $257,000
- Enrollment Status change for all borrowers: If enrolled less than full-time, loan eligibility (annual amount) will be prorated(reduced).
Parent PLUS Loans – Federal loans borrowed by parents to help pay for a child’s undergraduate education. Parents, not students, are responsible for repayment.
What’s Changing on July 1, 2026
- Current Parent PLUS borrowers: Parents who borrowed before July 1, 2026, may continue borrowing under existing Parent PLUS Loan rules for up to 3 more academic years or until the student completes their program – whichever comes first.
- New Parent PLUS borrowers: Be aware of the new caps listed below. Families may need to plan for additional funding sources, including private loans.
- Parents may borrow up to $20,000 per year, with a $65,000 lifetime maximum per student.
- Enrollment Status change for all borrowers: PLUS Loan eligibility is tied to the student’s cost of attendance and enrollment level. If a student is enrolled less than full-time, the PLUS loan amount borrowed will be prorated (reduced).
William D. Ford Direct Loan Programs
The Eastman School of Music participates in the Direct Student Loan Program, the Direct PLUS Loan Program, and the Direct Grad PLUS Loan Program. All Federal Direct Loans borrowed to cover costs while attending Eastman are borrowed through the Direct Lending process. For more comprehensive information about the William D. Ford Direct Loan Programs and who is eligible to borrow, please visit the Federal Student Aid website.
The Federal Direct Subsidized Loan is an educational loan for undergraduate students attending school at least half-time (6 units). Eligibility for this loan is based on a student’s calculated financial need as determined by the information provided on the FAFSA and the college’s cost of attendance. When a student is no longer enrolled or drops below half-time status, a 6-month grace period applies before repayment begins. The government pays the interest on the loan while the student is enrolled at least half-time, during the 6-month grace period, and during other authorized periods, such as deferments. The amount of loan offered is based on academic grade level and calculated financial need.
If a student is enrolled less than full-time, loan eligibility (annual amount) will be prorated (reduced).
The Federal Direct Unsubsidized Loan is an educational loan available to both undergraduate and graduate students attending school at least half-time (six units or more). A student’s need is not a factor for a Direct Unsubsidized Loan, and a student can qualify regardless of family income.  The government does not pay the interest; instead, the student can choose to either pay the interest while in school or have the interest added to the loan principal, which will be repaid later. The amount of loan offered is based on academic grade level. When a student is no longer enrolled or drops below half-time status, a 6-month grace period applies before repayment begins.
If a student is enrolled less than full-time, loan eligibility (annual amount) will be prorated (reduced).
Academic Year (AY) Direct Student Loan Limits
Federal regulations specify the maximum Federal Direct Loan amount a student can borrow each academic year based on grade level. Actual eligibility is specified in the Eastman financial aid package and may be less than the annual maximum.
| Grade Level & Dependency | Maximum AY Direct Subsidized Loan | Maximum AY Total Direct (Subsidized and Unsubsidized) |
| Freshman/Dependent | $3,500 | $5,500 |
| Sophomore/Dependent | $4,500 | $6,500 |
| Junior/Senior-Dependent | $5,500 | $7,500 |
| Freshman/Independent | $3,500 | $9,500 |
| Sophomore/Independent | $4,500 | $10,500 |
| Junior/Senior-Independent | $5,500 | $12,500 |
| Graduate Student | N/A | $20,500 |
Lifetime Direct Student Loan Limits – For Current Federal Loan Borrowers who borrowed prior to July 1, 2026
Federal regulations also specify the total lifetime limits a student can borrow.
| Grade Level & Dependency | Maximum Direct Subsidized Loan | Maximum Total Direct Loan (Subsidized and Unsubsidized) |
| Dependent/Undergraduate | $23,000 | $31,000 |
| Independent/Undergraduate | $23,000 | $57,500 |
| *Graduate Student | $65,500 | $138,500 |
*Note: The Graduate Student debt limit includes loans from undergraduate study.
Lifetime Direct Student Loan Limits – For New Federal Loan Borrowers after July 1, 2026
| Borrower Type | Aggregate |
| Dependent/Undergraduate | $31,000 |
| Independent/Undergraduate | $57.500 |
| Graduate Student |
$100,000 (not including Undergraduate) |
Total Lifetime Aggregate Student Loan Limit – $257,500 – without regard to any amounts repaid, forgiven, cancelled, or otherwise discharged.
Interest Rates
| Â | Borrower Type | Loans first disbursed on or after 7/1/25 and before 7/1/26 | Loans first disbursed on or after 7/1/24 and before 7/1/25 |
| Direct Subsidized Loans | Undergraduate | 6.39% | 6.53% |
| Direct Unsubsidized Loans | Undergraduate | 6.39% | 6.53% |
| Direct Unsubsidized Loans | Graduate | 7.94% | 8.08% |
Loan Origination Fees
An origination fee is subtracted from the requested loan amount, so the dollar amount disbursed will be less than the amount borrowed.
| Direct Subsidized Loans and Direct Unsubsidized Loans | |
| First Disbursement Date | Loan Fee |
| On or after Oct. 1, 2020 and before Oct. 1, 2026 | 1.057% |
| On or after Oct. 1, 2019 and before Oct. 1, 2020 | 1.059% |
Direct PLUS Loan Programs (Graduate Students & Parents of Dependent Students)
The Federal Direct Parent PLUS Loan is a credit-based loan with a fixed interest rate that allows parents to borrow up to the cost of attendance minus other financial aid awarded.  New annual and aggregate loan limits will be in effect after July 1, 2026, for all new Parent PLUS Loan Borrowers. See information above under “Federal Student Aid Changes Coming in 2026”.
Repayment of the principal and interest can be deferred while the student is enrolled in college, provided the PLUS Loan In-School Deferment Form is completed. This form is obtained from the assigned Federal Loan Servicer of your PLUS Loan. During a deferment period, interest will accrue and be capitalized or added back to the loan.
In the case where parents are separated/divorced, a stepparent can apply for a Federal PLUS Loan, but only if his/her information is included on the FAFSA.
If a parent is denied a Federal Direct Parent PLUS Loan, the student may be eligible for an additional Federal Direct Unsubsidized Loan ($4,000/year for freshmen and sophomores, and $5,000/year for juniors and seniors). A parent can request a credit check run to see if they qualify for a Federal PLUS Loan. The Credit Check Authorization Form can be faxed (585-232-8601) or submitted via our secure drop box (www.esm.rochester.edu/financialaid/submitting-docs).
The Federal Direct Grad PLUS Loan is a credit-based loan with a fixed interest rate that allows graduate students to borrow up to the cost of attendance minus any other financial aid they have been awarded. Repayment on the principal and interest can be deferred while the graduate student is enrolled in college by the completion of a Grad PLUS Loan In-School Deferment Form. This form is obtained from the Federal Loan Servicer of your Grad PLUS Loan. However, interest will accrue and be capitalized back into the loan.
After July 1, 2026, the Federal Direct Grad PLUS Loan will not be available to new Federal Loan Borrowers.
Interest Rates
| Â | Borrower Type | Loans first disbursed on or after 7/1/25 and before 7/1/26 *** | Loans first disbursed on or after 7/1/24 and before 7/1/25 |
| Parent PLUS Loan | Parent | 8.94% | 9.08% |
| Grad PLUS Loan | Graduate Student | 8.94% | 9.08% |
Loan Origination Fees
An origination fee is subtracted from the requested loan amount, so the dollar amount disbursed will be less than the amount borrowed.
| Direct PLUS Loan and Grad PLUS Loan | |
| First Disbursement Date | Loan Fee |
| On or after Oct. 1, 2020 and before Oct. 1, 2026 | 4.228% |
| On or after Oct. 1, 2019 and before Oct. 1, 2020 | 4.236% |
Direct Loan Processing (How to Apply?)
Federal Direct Student Loans (subsidized & unsubsidized) are available to students who apply for financial aid using the FAFSA. The FAFSA is the only application necessary to receive Federal Direct Student Loans.
For Federal Loans to be processed:
- A Student Borrower must accept the loans in their financial aid package through ESM FAOnline.
- A New Student Federal Loan Borrower must complete a Federal Loan Entrance Counseling Session.
- A New Student Federal Loan Borrower must complete a Federal Loan Master Promissory Note.
Federal Direct PLUS Loans (Parent & Graduate) can be applied for using an online application, and a new Federal PLUS Loan Borrower must complete a Federal PLUS Loan Promissory Note.
There is a 4.228% origination fee for both the Parent PLUS Loan and the Grad PLUS Loan. This fee is subtracted from the amount borrowed. If you wish to increase the loan amount borrowed to compensate for the origination fee reduction, please divide the amount that you wish to borrow by .95772 to calculate the loan amount, which includes the origination fee. Then, you can enter this amount in the online application.
Online PLUS Loan or Grad PLUS Loan Borrowers should avoid applying any earlier than 180 days before the start of the semester. Credit approvals are only valid for a specified period.
A FAFSA must also be on file for the dependent student of the parent applying for a Parent PLUS Loan or the graduate student applying for a Grad PLUS Loan.
Entrance Counseling Session – (Click here)
Required of all first-time student borrowers who have accepted the Federal Direct Student Loans (subsidized & unsubsidized) or Grad PLUS Loans as part of their financial aid package. You must complete this requirement before your Federal Direct Student Loan will be processed.
PLUS/Grad PLUS (Adverse Credit) Entrance Counseling Session – (Click here)
Required of all PLUS Loan or Grad PLUS Loan borrowers who have applied with an adverse credit decision date.
Master Promissory Note for Student Direct Loan Borrowers – (Click here)
Required of all first-time student borrowers who have accepted the Federal Direct Student Loans (subsidized & unsubsidized) as part of their financial aid package. A Department of Education FSA ID is needed to complete this promissory note online. You must complete this requirement before your Federal Direct Student Loan will be processed.
Master Promissory Note for Parent PLUS Borrowers – (Click here)
Required of all first-time parent borrowers who have applied and been approved for a Federal PLUS Loan. Borrowers will need a Department of Education FSA ID to complete this promissory note online. You must complete this requirement before your Federal PLUS Loan will be processed.
Master Promissory Note for Grad PLUS Borrowers – (Click here)
Required of all first-time graduate student borrowers who have applied and been approved for a Federal Grad PLUS Loan. Borrowers will need a Department of Education FSA ID to complete this promissory note online. You must complete this requirement before your Federal Grad PLUS Loan will be processed.
State Educational Loan Programs
Some state governments offer an educational loan program. These programs:
- are available to both undergraduate and graduate students (and possibly to parents and relatives), as long as the student is matriculated and enrolled at least half-time in a degree program.
- are credit-based and offer interest rates and terms that are very competitive with alternative loans.
- may have both fixed and variable interest rates available, depending on the state.
To learn if your state has a loan program, contact your State Education Agency through College Scholarships’ Directory of Student Loans for Every US State. Read the loan criteria carefully and contact your State Education Agency with questions.
Private Alternative Loans
Domestic and international students who have a U.S. citizen or eligible permanent resident as a co-applicant may qualify for a private loan to help bridge the gap between the student’s cost of attendance and the student’s family resources and financial aid package.
We encourage students and parents to exhaust all Federal loan options prior to applying for a private loan. The Federal loan programs generally offer lower interest rates and fees along with better repayment options.
International students are not eligible for the Federal loan programs.
If a student chooses to pursue a private loan, we recommend comparing the costs associated with various lenders before completing an application. Interest rates, fees, repayment periods, and other benefits can vary significantly between lenders. Often, these loans are based on creditworthiness, and approvals are not automatic.
The Eastman School of Music cannot recommend or endorse any particular alternative loan option. As such, the University has no agreements or relationships with lenders and does not receive any financial or other benefits from students’ use of private loans. For more information on the University’s policies, please see our Student Loan Code of Conduct & Policy on Private Lending.
Alternative loan terms, including interest rates, fees, repayment terms, and other variables, will be determined based on the borrower’s application and credit score. Therefore, the University cannot provide you with information about the comparative pricing of private loans nor about the likelihood of your being approved with or without a cosigner.
To assist students in researching alternative loan options, we work with Elm Select to feature a variety of alternative loans that Eastman students have borrowed in recent years. Students are not required to pursue a lender featured on ElmSelect and will not be penalized or disadvantaged if they choose to borrow from another lender.
The FinAid.org website also provides some comparative information regarding private loans. When selecting a loan through any other comparison website, be sure to visit the lender’s specific site to ensure you are aware of the most up-to-date information about the loan.
Private Loan Application Requirements
All private educational lenders are required to send three disclosure statements as well as a self-certification form to all borrowers. The borrower must complete and return these statements to the lender before the application process is complete, and for any loan funds to be sent to the student’s school.
Disclosures
The lender will send three disclosures to the borrower.
- Application Disclosure — sent once the lender receives the loan request from the student.
- Approval Disclosure — sent once the student’s credit is approved by the lender. Please note that the borrower has 30 days from receipt of the approval disclosure to notify the lender that they accept the loan offer.
- Final Disclosure– sent to the borrower after the lender has received the following items:
- acceptance of the approval disclosure by the borrower.
- the private loan applicant self-certification form completed by the borrower.
- certification of the loan by the borrower’s school.
Be aware that the lender is required to wait at least 3 or more business days after the final disclosure is sent before they can send the loan funds to the school.
Private Education Loan Applicant Self-Certification Form
In addition to the disclosures, the lender will also send the borrower a self-certification form. This form is sent once the credit approval is received for the private loan application. The borrower must complete and return this form to the lender.
Keep in Mind
Due to these requirements, all students will need to allow for additional time for loan certification and disbursement processing. This additional time may cause:
- late fees on a student account.
- a delay in the receipt of a potential refund.
- a delay of student participation in registration and housing lotteries in the event that a financial hold exists on the student’s account.
Definitions of Common Loan Terms
- Principal-The loan amount that must be repaid once the loan enters Repayment Status and the amount upon which interest will be charged.
- Interest-The charge made to a borrower for use of a lender’s money. See your promissory note for interest rate terms and conditions.
- In-School Deferment:Â The period of time when the student borrower is enrolled at least half-time at the Eastman School of Music and is not required to pay loan principal.
- In-Repayment:Â The period of time after the borrower has either finished their degree (graduated), dropped below half-time status, withdrawn from school, or taken a Leave of Absence during which the borrower is responsible to pay BOTH principal and interest payments on their loans.
- Forbearance: The temporary postponement of payments, such as allowing for an extension of time for making payments or accepting smaller payments than previously scheduled.
- Origination or Supplemental Fee: It will be included in the balance used to calculate interest charges.
- Servicing Company: The company that handles a student’s payments and loan account(s) after the loan(s) are disbursed to the student’s school account.
Federal & Private Loan Disbursement/Requesting a Refund
Loans are disbursed to student accounts at the beginning of both the fall and spring semesters, provided that all the necessary requirements have been met.
Federal Loan (subsidized, unsubsidized, Parent PLUS & Grad PLUS) borrowers are notified when a disbursement is made to the student’s account. Requests for loan adjustments (cancellations or reductions) must be submitted in writing to the Financial Aid Office within 14 days of receiving the disbursement notification email.
Change in Aid Request Form https://www.esm.rochester.edu/uploads/25-26-Change-Aid-Form-1.pdf– Required for all borrowers who wish to make a change in their Loans (Subsidized, Unsubsidized, Parent PLUS, Grad PLUS, Alternative). This form is completed and submitted to the Financial Aid Office.
Loan Disbursement Dates
*** 2025-26 Academic Year ***
| Loan Period Title | Loan Period Dates | Earliest Disbursement |
| Summer Session 2025 | 06/30/2025 – 08/01/2025 | First day of classes for individual student |
| Fall 2025 | 08/25/2025 – 12/17/2025 | 08/18/2025 |
| Spring 2026 | 01/20/2026 – 05/10/2026 | 01/13/2026 |
| Summer Session 2026 | 06/29/2026 – 07/31/2026 | First day of classes for individual student |
Requesting a Refund – For further information about the process of requesting a credit refund, please visit the Payments & Refunds section of the University Bursar’s Website.
Enrollment Status Change
When a Federal Loan (subsidized, unsubsidized & Graduate PLUS) student borrower experiences an enrollment status change, they must complete an online Exit Counseling Session and enter the loan repayment process. Students with questions about their Federal Loans are encouraged to contact the Eastman Financial Aid Office and meet with their counselor. For in-depth information about the loan repayment process, please visit the Federal Student Aid website.
Federal Direct Loan Exit Counseling Session – (Click here)
Required of all Federal Direct Loan student borrowers at the time they graduate, drop below half-time status (6 credits), take a leave of absence, or withdraw from the Eastman School of Music. Students graduating at the end of the spring semester will be sent an Exit Counseling Information Session in April. All other students will be sent Exit Counseling information at the time of their enrollment status change.
Repayment Terms & Resources
How Much Did I Borrow in Federal Loans?
Borrowers can visit the Manage Loans section of the Department of Education’s Federal Student Aid website to view information about the status of their federal student loans and to find contact information for their loan servicers (lenders).
A loan servicer is a company that handles billing and other services on a federal student loan. The loan servicer administers repayment plans, loan consolidation, and assists with other tasks related to federal student loans. Borrowers should maintain contact with their loan servicer. A loan servicer is assigned to a loan by the U.S. Department of Education after the loan has been disbursed. Check the accuracy of your Federal Direct Loan servicer contact information here.
For Federal Perkins Loan Borrowers, your loan servicer is Heartland ECSI.
When a student graduates, drops below half-time status (6 units), takes a leave of absence, or withdraws from the Eastman School of Music, their loans revert to their In-School Deferment status and enter their Grace Period. The grace period for Direct Loans is 6 months, and for Perkins Loans is 9 months.
Repayment Plans for Student Borrowers
After a student graduates, drops below half-time enrollment status, or leaves school, they are required to repay their federal student loans under a chosen repayment plan. Current Federal Student Loan Repayment Information can be found here: https://studentaid.gov/manage-loans/repayment/plans
We encourage any borrower currently repaying their federal loans to contact their loan servicer and discuss how these changes may affect their situation. This website provides a high-level overview; however, current borrowers in repayment may want to consider additional details before making a decision on how to proceed.
What’s Changing on July 1, 2026
- Some existing repayment plans will end (ICR, PAYE, and SAVE).
- A new income-based repayment plan (Repayment Assistance Plan, or RAP) will be created. Payments under this plan will be determined based upon several factors:
- payments may be as low as $10/month,
- adjusted for dependents,
- and possibly forgiven after 30 years of payments.
- A new standard repayment plan will be created. Payments under this plan will have 4 fixed terms of 10, 15, 20, or 25 years (based on the amount borrowed).
What This Means for You
- Current Borrowers:
- If no new loans are made on or after July 1, 2026, you are eligible to enroll in the current Standard, Graduated, Extended, or income-based (IBR) repayment plan, or you may opt into the new RAP.
- If you are currently enrolled in ICR, PAYE, or SAVE, you must transition to a different repayment plan by July 1, 2028 (either your current income-based repayment plan, your current standard plan, or RAP). If no selection is made, you will be automatically moved to RAP.
- It’s important to note that all loans must be repaid under the same plan. So, borrowers with loans made before July 1, 2026, who take out additional loans on or after July 1, 2026, will only have RAP and the new standard plan to choose from.
- New Borrowers: For loans made on or after July 1, 2026, there will be two repayment plan options – the new standard repayment plan or RAP. If no selection is made, you will be assigned to the new standards payment plan.
Repayment Plans for Parent Borrowers
Parent borrowers may choose to defer payments until six months after their student graduates, leaves school, or drops below half-time enrollment status. Otherwise, payments begin once the loan is fully disbursed (paid out) unless you request a deferment. Current Federal Parent PLUS Loan Repayment Information can be found here: https://studentaid.gov/understand-aid/types/loans/plus/parent#repayment-plans
We encourage any borrower currently repaying their federal loans to contact their loan servicer and discuss how these changes may affect their situation. This website provides a high-level overview; however, current borrowers in repayment may want to consider additional details before making a decision on how to proceed.
What’s Changing on July 1, 2026
- A new standard repayment plan will be created. Payments under this plan will have 4 fixed terms of 10, 15, 20, or 25 years (based on the amount borrowed).
What This Means for You
- Current Borrowers:
- If no new loans are made on or after July 1, 2026, you are eligible to enroll in the current Standard, Graduated, Extended, or income-based (IBR) repayment plan.
- If you borrowed prior to July 1, 2026, AND subsequently borrow after July 1, 2026, repayment for all loans must be under the same payment plan, which is the new standard payment plan.
- New Borrowers: For loans made on or after July 1, 2026, they can be repaid using only the new standard plan to choose from.
Avoid Student Loan Repayment Scams
At the end of the grace period, students are required to begin repayment on their loans. If a borrower is not able to make payments at any point during the repayment period, then the borrower must make arrangements with the Federal Loan Servicer(s) to change the loan payment plan(s), defer the loan payments, or place the loan(s) in forbearance. Students should contact their Federal Loan Servicer(s) directly to discuss their options.
Borrowers who wish to defer payment on the principal and/or interest of their Federal Loans due to extenuating circumstances will need to contact their Federal Loan Servicer(s) about the Deferment Process.
Consolidation can simplify loan payments and lock in a fixed interest rate. Borrowers considering consolidation are advised to consult with their Federal Loan Servicer(s)or with a Financial Aid Counselor prior to consolidating their loans.
Loan Forgiveness, Cancellation & Discharge
Under certain circumstances, borrowers may qualify for forgiveness, cancellation, or discharge of their Federal Loans.