Federal Policy Changes

Helping You Navigate Changes to Loans and Grants

On July 4, 2025, the One Big Beautiful Bill Act (OBBBA) was signed into law, bringing changes to federal student aid programs. Some changes took effect right away, while others are scheduled to begin in 2026 and later. This page outlines updates that potentially impact your federal student aid, including undergraduate, graduate and parent borrowers, and will be revised as additional information becomes available.

Have questions on how this may impact you? Contact our office today to speak with one of our counselors. 

Undergraduate Loans and Grants

For traditional undergraduate students and Bachelor's Degree for Professionals students

Pell Grant Eligibility

The biggest impacts to your federal aid will be how your Pell Grant eligibility is calculated and the requirements to receive your full loan amounts. Pell Grant eligibility is now more closely tied to your Student Aid Index (SAI), which means aid is more strictly based on your family’s financial situation reported on your FAFSA.

What impact does this have?

• You might receive a smaller Pell Grant than expected
• You may no longer qualify for the Pell Grant despite receiving it in previous years
• If your costs are already fully covered by other scholarships, you may not receive Pell funds

Loan Eligibility

Another change to pay attention to is your enrollment status. Previously, in order to eligible for federal student loans, you needed to maintain atleast a half-time enrollment status. With OBBBA, your federal loan eligibility is directly tied to the number of credits you are enrolled in.

For the 2026-2027 year, in order to receive the full annual federal loan amount, students must be full-time. If you enroll in less than 12-credits (full-time), there will be a scheduled reduction of your loan.

Parent PLUS Loans

For parents of traditional undergraduate students

New federal rules will change how much parents can borrow through the Parent PLUS Loan program, as well as the repayment options available for those loans. These changes do not affect how much undergraduate students can borrow through their own federal loans.

Under the new law, Parent PLUS Loans will be limited to:

• $20,000 per year, and
• $65,000 total per student

However, there is a temporary exception for families with students who are already enrolled.

To qualify for the temporary exception, the student must:

• Remain continuously enrolled in the same program at the same school they were attending as of June 30, 2026

In addition, one of the following must be true:

• The parent previously received a Parent PLUS Loan for that student’s program before July 1, 2026, OR
• The student received a federal Direct Loan (subsidized or unsubsidized) for that program before July 1, 2026

If the above conditions are met, the new loal limits will not apply right way under the limited exception. Parents who qualify will be able to continue borrowing under the current rules for up to three years or until their student finishes their program (whiever happens first). In order to remain continuously eligible for the limited exception, the student must stay continously enrolled in their program (no full withdraws or unapproved breaks).

To learn more about important updates that parents need to know, please review this handout.

Graduate Loans

For all graduate students

With the OBBBA, federal loans for graduate students have new lifetime limits based on program type. This means that there is now a maximum total amount you can borrow, no matter how expensive your program is.

What this could mean for you:

• You may not be able to borrow enough federal student loans to cover your full cost of attendance
• Once you reach your limit, you cannot borrow more in federal loans
• To learn more about important updates that Graduate students need to know, please review this handout
• To learn more about important updates that PsyD students need to know, please review this handout

Loan Repayment (All Federal Loan Borrowers)

For any federal loans (Subsidized, Unsubsidized, Parent PLUS Loan, or Grad PLUS Loan) borrowed on or after July 1st, 2026,  only two repayment plans will be available:

• A standard repayment plan with fixed monthly payments
• A single income-based repayment plan (RAP) tied to your earnings

Have more questions on what these changes mean for your aid? Visit the One Big Beautiful Bill Act webpage on the Federal Student Aid website to learn more.