One Big Beautiful Bill Act Updates

Federal Pell Grant

Students whose Scholarship and/or Grants cover their full Cost of Attendance

Students who receive grants or scholarships from non-federal sources covering their entire cost of attendance (COA) are ineligible to receive a Federal Pell Grant, even if otherwise eligible for the program. (Effective July 1, 2026). 

Federal Direct Student Loans

Loan Proration for Part-Time Students

Reduces the amount of a loan that a student may borrow for an academic year if the student is enrolled in a program of study on less than a full-time basis during that academic year.  (The guidance that analysts have provided indicates the effective date of this change will be for the 2026-2027 award year.) 

Federal Direct Parent Loan for Undergraduate Students (PLUS) Loans

The law includes new Parent PLUS loan limits (effective July 1, 2026): 

• $20,000 per year cap per dependent student 
• $65,000 aggregate limit per dependent student (without regard to amounts forgiven, repaid, canceled, or discharged)

Graduate Student Loans

Graduate students will be limited to an annual loan limit of $20,500 and a lifetime borrowing maximum of $100,000.   This limit does not include amounts borrowed as an undergraduate student.  

The Graduate PLUS Loan program will be discontinued. 

Opportunity for New Borrowers in 2025–2026: If you have not yet borrowed a Parent PLUS Loan but are considering doing so, we strongly encourage you to contact the Office of Financial Aid before the end of the 2025–2026 academic year. Borrowing even a small amount prior to July 1, 2026, could make you eligible for the legacy provision, preserving your ability to borrow under the current structure in future years.

Federal Pell Grant

Students whose Scholarship and/or Grants cover their full Cost of Attendance

Students who receive grants or scholarships from non-federal sources covering their entire cost of attendance (COA) are ineligible to receive a Federal Pell Grant, even if otherwise eligible for the program. (Effective July 1, 2026). 

Federal Direct Student Loans

Loan Proration for Part-Time Students

Reduces the amount of a loan that a student may borrow for an academic year if the student is enrolled in a program of study on less than a full-time basis during that academic year.  (The guidance that analysts have provided indicates the effective date of this change will be for the 2026-2027 award year.)

Federal Direct Parent Loan for Undergraduate Students (PLUS) Loans

If a parent borrower has a Federal Direct PLUS Loan made before July 1, 2026, while the dependent student is enrolled in a credentialed program, the parent can continue to borrow under current loan limits for 3 academic years or the remainder of their dependent student’s expected time to credential, whichever is less.

Graduate Student Loans

Grad PLUS Loans

The Graduate PLUS program is eliminated effective July 1, 2026, with legacy provisions for current borrowers to complete their program of study.  A legacy borrower is defined as a borrower who has a Grad PLUS loan made before July 1, 2026, and who is enrolled in a credentialed program. The borrower can continue to borrow from the program for three academic years or the remainder of their expected time to credential, whichever is less.

Repayment Plan for Current Borrowers 

Current borrowers with no new loans made on or after July 1, 2026, are eligible to enroll in the current Standard, Graduated, Extended, or current Income Based (IBR) repayment plans, and may also opt in to the new Repayment Assistance Plan (RAP). Current borrowers may also switch between, enter or remain on existing Income Driven Repayment (IDR) plans until July 1, 2028.

Borrowers with loans made before July 1, 2026, who take out additional loans on or after July 1, 2026, will only have the Repayment Assistance Plan (RAP) and the new standard repayment plan as options.