Key Federal Aid Changes
Effective for the 2026-2027 Academic Year
With the implementation of The One Big Beautiful Bill Act (OBBBA), passed by Congress and signed into law in July 2025, there are significant changes to federal student aid programs beginning July 1, 2026 for the 2026-2027 academic year. Some of the changes relevant to undergraduate financial aid recipients are summarized below.
This information reflects our current understanding of these changes as of May 2026 and is subject to change if the U.S. Department of Education provides additional guidance. For the most updated information, please visit https://studentaid.gov/announcements-events/big-updates.
Federal Pell Grant
Changes to Eligibility
Students are not eligible for the Pell grant if they are receiving non-federal grants or scholarships that equal or exceed their Cost of Attendance even if otherwise eligible.
Federal Direct Loans (Subsidized and Unsubsidized)
Loan Proration
Students that are not full-time (12 credit hours per semester) will have loan amounts prorated based on their level of enrollment. For example, a student taking 6 credits for the Fall semester will only be eligible for half of the Fall portion of their loans (or 25% of their annual loan amount).
Students must still meet the requirements to be eligible to receive a federal student loan and be enrolled at least half-time (6+ credits required for their degree).
Parent PLUS Loans for Dependent Undergraduate Students
New Parent PLUS loan borrowers will be subject to the following limits:
- Annual limit: No more than $20,000 per dependent student
- Lifetime limit: No more than $65,000 for each dependent student
Legacy Provision for Continuing Students
Must have borrowed a Direct Loan or Parent PLUS loan prior to 7/1/26:
- Annual Limit: Parents may have the option to borrow more Parent PLUS loan funds above the new OBBBA annual limit, provided they do not exceed the Cost of Attendance minus Other Financial Aid for their dependent student, AND the student has not exceeded the length of time for their degree program.
- Lifetime limit: Parents may have the option to borrow more Parent PLUS loan funding above the new OBBBA lifetime limits for their dependent student provided the student has not yet exceeded the length of time for their degree program.
Simplified Federal Loan Repayment Plans
For loans taken out on or after July 1, 2026, repayment plan options have been simplified to the two following plans:
- Tiered Standard Repayment: Fixed monthly payments over 10-25 years based on your total loan balance.
- Repayment Assistance Plan (RAP): Income-based payments (1%-10% of income). Remaining balances are forgiven after 30 years.
Frequently Asked Questions
Under the new regulations, Federal Direct Loans will now be proportionally reduced based on your enrollment level. Previously, many students could receive a full loan amount as long as they were at least half-time. Starting July 1, 2026, if you are enrolled half-time (typically 6 credits), your loan eligibility will be roughly 50% of a full-time award.
There is a possibility that some of your loan funds or other aid may need to be returned for the current term or for a future term. Please contact the Financial Aid Office for more information.
No. If you have already attended for 4 years, you have no remaining time for your degree program and would not qualify for legacy borrowing limits. You would be subject to the new OBBBA lifetime limit of $65,000 (which would include your previously borrowed Parent PLUS loan amounts) and the annual limit of $20,000.