The One Big Beautiful Bill Act:
Key Changes to Federal Student Aid
The One Big Beautiful Bill Act (OB3), signed into law on July 4, 2025, introduces significant changes to federal student loan eligibility and repayment. While some provisions are effective immediately, most major changes begin on July 1, 2026.
There were no changes to federal student aid for the Fall 2025 and Spring 2026 terms.
The Office of Financial Aid is committed to helping our community navigate these updates. We will provide further guidance as it is released by the U.S. Department of Education. For the latest official information, please visit studentaid.gov
Federal Pell Grant Eligibility Changes (Effective July 1st, 2026)
Effective July 1, 2026
Beginning with the 2026–27 award year, the following eligibility rules apply:
Income Calculation: Any foreign earned income exclusion reported on the FAFSA will now be added to your
Adjusted Gross Income (AGI) when determining Pell eligibility.
Full Scholarships: Students receiving non-federal grants or scholarships that cover their full Cost of
Attendance (COA) are no longer eligible for a Federal Pell Grant.
SAI Threshold: Students with a Student Aid Index (SAI) equal to or greater than twice the maximum
Federal Pell Grant for that year will be ineligible. Example: If the maximum Pell
Grant is $7,395, a student with an SAI of $14,790 or higher will not qualify.
Exceptions: Limited exceptions remain for the dependents of deceased service members and public safety officers.
Federal Loan Changes: Undergraduate Students
Effective July 1, 2026
New Parent PLUS Loan Limits: New borrowers are limited to $20,000 annually and a $65,000 aggregate total per dependent
student.
Lifetime Borrowing Limit: A new $257,500 lifetime limit applies to all combined federal student loans (excluding
Parent PLUS).
Loan "Schedule of Reduction": Federal loan amounts will now be prorated based on enrollment status. Students enrolled less than full-time will see a reduction in their loan eligibility. Enrollment status is determined by the specific requirements of the student's program.
Parent Borrower Legacy Provision: If a parent borrowed a Federal Direct Loan before July 1, 2026, for a student currently enrolled in a credentialed program, they may continue to borrow under the old limits for the remainder of their published program length (up to a maximum of three academic years).
Federal Loan Changes: Graduate Students
Effective July 1, 2026
Graduate PLUS Loans: This program will no longer be available to new borrowers as of July 1, 2026.
Annual & Aggregate Loan Limits:
- Standard Graduate Students: $20,500 annually / $100,000 aggregate.
- Professional Students (PharmD and PhD in Clinical Psychology): $50,000 annually / $200,000 aggregate.
- Note: These specific caps do not include debt accrued during undergraduate studies.
Total Lifetime Limit: A $257,500 total limit applies to all undergraduate and graduate federal loans (includes Graduate PLUS; excludes Parent PLUS).
Legacy Provision for Graduate Students: Current students with a Federal Direct Loan disbursed before July 1, 2026, may continue borrowing under previous limits for the remainder of their published program length or for up to three additional years (whichever comes first).
Additional Federal Loan Changes
Repayment Plan Updates
- Effective Immediately: Revised Income-Based Repayment (IBR) plans are now available.
- New Borrowers: Two new repayment plans will be introduced for those who receive their first loans on or after July 1, 2026.