The Department of Education’s Reimagining and Improving Student Education (RISE) Committee has concluded the first round of negotiated rulemaking under the One Big Beautiful Bill (OB3) statute. Despite a partial federal government shutdown during the session, the Department had planned in advance to keep key Federal Student Aid staff working to meet statutory deadlines—allowing the process to move forward on schedule.
The week marked an important step in shaping regulations that will redefine student lending and repayment. While progress was made across several discussion papers, major issues—including loan limits, repayment plan design, and program definitions—remain unresolved as the Department and negotiators prepare to reconvene November 3–7 for the final round of talks.
Key Themes and Ongoing Challenges
The RISE Committee spent much of the week debating five discussion papers that will form the framework for federal loan transition and repayment policy. Two topics dominated the conversation: Fixed Loan Repayment Plan Provisions and Loan Limit Provisions, both of which intersect with nearly every other component of the proposed regulations.
Defining the “Professional Student”
The definition of a “professional student” remains one of the most significant areas of debate. The Department proposed aligning the definition with existing Title IV regulations and identified 11 specific programs—including medicine, dentistry, veterinary medicine, law, pharmacy, and optometry—as examples of professional programs.
Negotiators agreed the list should not be treated as exhaustive. Current regulatory language describes these programs as “examples,” and committee members urged the Department to broaden the definition to include additional programs that award professional credentials or lead to licensure but fall outside the eleven fields.
The outcome of this discussion will directly affect institutional compliance and borrower eligibility. Under OB3, graduate students are limited to $20,500 annually and $100,000 in aggregate unsubsidized loans, while professional students may borrow up to $50,000 annually and $200,000 in aggregate. The final definition will determine which programs qualify for the higher limits—making this a high-impact decision for institutions.
Grandfathering Provision for Existing Borrowers
Another area of clarification involved the grandfathering provision for current borrowers.
Students who are enrolled in a program and have received a Direct Loan prior to June 30, 2026 may continue borrowing under the existing annual and aggregate loan limits—but only for their remaining expected time to credential, up to three years.
This exception applies only to the specific program in which the borrower is currently enrolled. If a student transfers to another institution or changes programs, the new loan limits would apply. To remain eligible, students must also maintain continuous enrollment, although an approved Leave of Absence (LOA) will not disqualify them.
Institutions will need clear procedures to document program continuity, monitor LOA approvals, and communicate loan eligibility changes to affected students. This provision introduces new operational tracking requirements that will require close coordination among financial aid, registrar, and compliance offices.
Prorated Loan Amounts Based on Enrollment Intensity
A major proposed change under discussion would require institutions to prorate loan eligibility based on enrollment intensity—reducing annual loan limits for students enrolled less than full time.
Under this proposal, a student’s annual loan eligibility would be adjusted proportionally to their enrollment level. For example, a student enrolled at 75% of full-time would be eligible for only 75% of the standard annual loan limit. The Department intends to publish a standardized “schedule of reductions” defining these calculations and rounding conventions.
This change would have far-reaching implications for schools serving part-time students or programs with variable enrollment models. Clarity was gained from the Department’s draft regulations that dictate calculations are to be made at enrollment at the beginning of a payment period. Any changes in status during a payment period do not need to be recalculated, but institutions must adjust loan limits in the succeeding payment period. Institutions will need to determine how mid payment period enrollment level changes will impact future aid and how proration interacts with other federal aid programs such as Pell Grants and Return to Title IV (R2T4) requirements.
Operationally, the new rule would require updates to packaging processes, software systems, and communication protocols to ensure students understand how their enrollment choices directly affect loan eligibility.
Transitioning the Federal Loan System
The Department also reviewed the overall timeline for transitioning from existing loan repayment programs to the new framework:
- July 4, 2025 – June 20, 2028: Implementation of special income-contingent repayment (ICR) provisions.
- July 1, 2026: Launch of the new Repayment Assistance Plan (RAP).
- June 30, 2028: Full sunset of legacy loan programs.
Committee members noted the complexity of overlapping deadlines and urged the Department to provide early operational guidance. Institutions, servicers, and borrowers will need to manage concurrent system and communication changes over several award years.
What Happens Next
The RISE Committee will reconvene November 3–7 for its final negotiation session. If consensus is not reached, the Department may move forward with its own proposed regulations for public comment.
In the interim, institutions should:
- Monitor evolving definitions and formulas, particularly for professional student classification and enrollment-based loan proration.
- Review system capabilities to ensure readiness for new packaging and eligibility calculations.
- Evaluate policy documentation around program continuity and approved LOAs for grandfathered borrowers.
McClintock Perspective
The first week of RISE negotiations underscores the magnitude of the coming changes under the One Big Beautiful Bill. The emerging rules on professional student classification, grandfathering exceptions, and proration of loan limits represent fundamental shifts in how federal loans will be awarded and administered.
McClintock & Associates will continue monitoring the second round of negotiations and provide practical guidance as draft regulatory text becomes available. Institutions should begin scenario planning now—evaluating system readiness, documentation standards, and the potential financial impact of these provisions—to stay ahead of this historic transition.
If you have questions or need assistance preparing for these changes, please contact us.
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