Changes to Federal Financial Aid & What Students Need to Know
Please Note:
This information reflects federal legislation and guidance available as of November 2026 and is subject to change. Student Financial Services will update this page as additional guidance becomes available. Please contact our office with questions about how these changes may affect your financial aid.
The One Big Beautiful Bill Act (OBBBA), signed into law July 4, 2025, makes significant changes to federal student aid programs. Most changes took effect July 1, 2026, beginning with the 2026–27 academic year. Additional changes take effect in 2027 and 2028.
Federal Student Loan Program
New and Legacy Borrowers
Some students who borrowed before July 1, 2026, may qualify for temporary exceptions to the new loan limits and requirements.
To generally qualify for legacy protections, students must have:
Been enrolled in the same academic program at the same institution on June 30, 2026.
Received a Direct Loan for that program before July 1, 2026, that has not been fully repaid.
Eligible students may continue borrowing under previous limits for a limited period, generally the lesser of three academic years or the remaining time needed to complete their program.
Transferring schools or changing academic programs may affect eligibility. Contact Student Financial Services before making academic changes.
New Borrower: A student who has not received a Direct Loan before July 1, 2026, or has fully repaid previous Direct Loans.
Legacy Borrower: A student who meets the enrollment and borrowing requirements for the temporary legacy protections.
Elimination of Graduate PLUS Loans
Beginning July 1, 2026, Graduate PLUS Loans are no longer available to new borrowers. Previously, these loans allowed eligible graduate and professional students to borrow up to their remaining cost of attendance.
Students who qualify for legacy protections may continue borrowing under previous rules for the limited period permitted by law.
Schedule of Reduction (Loan Proration)
Beginning July 1, 2026, federal Direct Loan limits are reduced proportionally for students enrolled less than full time.
Full-time students may qualify for their full annual loan limit.
Less-than-full-time students have reduced loan eligibility based on enrollment.
Students enrolled below half time are not eligible for federal Direct Loans.
This requirement applies to eligible Direct Subsidized and Unsubsidized Loans, including graduate Direct Unsubsidized Loans, but not Parent PLUS Loans.
Changes in enrollment may affect loan eligibility and future disbursements. Contact Student Financial Services before dropping classes if you have questions about the impact on your loans.
These changes apply to federal Direct Loans, not private education loans. Private lenders set their own eligibility requirements.
Federal Student Loan Repayment Options
New Repayment Plans
Beginning July 1, 2026, two new repayment plans became available:
Repayment Assistance Plan (RAP): Monthly payments are based on income and other factors.
Tiered Standard Repayment Plan: Fixed monthly payments with repayment periods based on the amount borrowed.
Repayment options depend on loan type, disbursement date, and borrowing history. Borrowers receiving new Direct Loans on or after July 1, 2026, may lose access to certain existing repayment plans.
For repayment questions, contact your federal loan servicer or visit StudentAid.gov to identify your servicer.
Important Repayment Dates
July 1, 2026: New repayment plans and loan provisions take effect.
July 1, 2027: Additional repayment provisions take effect.
July 1, 2028: Certain existing repayment plans, including PAYE and ICR, are scheduled to end. Affected borrowers must transition to an eligible plan.
Parent PLUS Loan Repayment
Parent PLUS Loans first disbursed on or after July 1, 2026, are eligible only for the Tiered Standard Repayment Plan. They are not eligible for RAP or other income-driven repayment plans.
Borrowers who qualify for legacy protections may retain certain previous repayment options.
Consolidation Loan Repayment
Repayment options depend on when the consolidation loan was made and whether it includes Parent PLUS debt.
Consolidation loans without Parent PLUS debt: Eligible loans made on or after July 1, 2026, may qualify for RAP or the Tiered Standard Repayment Plan.
Consolidation loans with Parent PLUS debt: New loans made on or after July 1, 2026, are generally eligible only for the Tiered Standard Repayment Plan.
Some borrowers who consolidated Parent PLUS Loans before July 1, 2026, may qualify for Income-Based Repayment (IBR), subject to additional requirements, including applicable transition deadlines.
Important: Consolidating federal loans can change repayment eligibility. Contact your loan servicer before consolidating.
Federal Pell Grant Program
The OBBBA provides $12.67 billion in additional funding to address the projected Pell Grant funding shortfall. It also introduces new eligibility requirements beginning July 1, 2026.
Pell Grant Eligibility Changes
1. Other Grant Aid Covers Full Cost of Attendance
Students are not eligible for a Pell Grant when nonfederal grant assistance equals or exceeds their full Cost of Attendance (COA) for the applicable period.
Nonfederal grant assistance may include state grants, institutional scholarships, and private grants.
2. Higher Student Aid Index (SAI)
Students whose SAI is equal to or greater than twice the maximum Pell Grant award for the applicable year are generally ineligible, subject to a limited statutory exception.
For 2026–27:
Maximum Pell Grant: $7,395
SAI eligibility threshold: $14,790
These amounts may change in future award years.
