One Big Beautiful Bill Act

Financial Aid

The One Big Beautiful Bill Act (OBBBA), enacted in July 2025, introduces several important changes to student financial aid eligibility beginning with the 2026–2027 academic year. These updates will have a significant impact to financial aid eligibility of both students and parents. Please review the key changes outlined below to understand the implications that be effective July 1, 2026.

Undergradaute students

Foreign income and pell eligibility

  • Requires that foreign income be included in the AGI used to calculate Pell Grant eligibility.

Full COA scholarships and grants

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

Students with high SAI

  • Prevents students from receiving Pell Grants if their SAI exceeds twice the maximum Pell Grant award.

Federal loan program lifetime loan limits

  • Change: $257,500 lifetime borrowing limit on all federal student loans, excluding borrowed Parent PLUS loan amounts (in the case of a dependent student who had ParentPLUS borrowed on their behalf for education expenses). Effective July 1, 2026.
  • Legacy provision: If a borrower has a Federal Direct Loan made before July 1, 2026, while enrolled in a credentialed program, the borrower can continue to borrow under current loan limits for three academic years or the remainder of their expected time to credential, whichever is less.
  • Loan proration: Requires institutions to prorate annual loan amounts in direct proportion to the percent of full-time status the student is enrolled.

Parent PLUS annual and aggregate loan limits

  • Change: All parents (combined) may borrow $20,000 per year per dependent student and a $65,000 aggregate limit per dependent student (without regard to amounts forgiven, repaid, canceled, or discharged). Effective July 1, 2026.
  • Legacy provision: If a borrower has a Federal Direct 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.
  • Loan proration: Requires institutions to prorate annual loan amounts in direct proportion to the percent of full-time status the student is enrolled.

Graduate students

Graduate PLUS loan program

  • Effective July 1, 2026 the Graduate PLUS loan program will be eliminated.
  • Legacy provision: If a borrower has a Federal Direct Loan made before July 1, 2026, while enrolled in a credentialed program, the borrower can borrow from the GradPLUS program for three academic years or the remainder of their expected time to credential, whichever is less. Effective July 1, 2026.

Graduate/Professional annual and aggregate loan limits

  • Change: Caps the annual loan limits at $20,500 for graduate students and $50,000 for professional students. The aggregate limit is capped at $100,000 for graduate students and $200,000 for professional students, and does not include amounts borrowed as an undergraduate. (Borrowers who are both graduate and professional students at some point in their educational careers may only borrow up to $200,000 in total for graduate and professional school). The lifetime borrowing limit for all federal student loans is $257,500, excluding borrowed Parent PLUS loan amounts. Effective July 1, 2026.
  • Legacy provision: If a borrower has a Federal Direct Loan made before July 1, 2026, while enrolled in a credentialed program, the borrower can continue to borrow under current loan limits for three academic years or the remainder of their expected time to credential, whichever is less. A professional student is a student enrolled in a program of study that awards a professional degree, as defined under section 34 CFR 668.2. Examples of a professional degree include but are not limited to Pharmacy (Pharm.D.), Dentistry (D.D.S. or D.M.D.), Veterinary Medicine (D.V.M.), Chiropractic (D.C. or D.C.M.), Law (L.L.B. or J.D.), Medicine (M.D.), Optometry (O.D.), Osteopathic Medicine (D.O.), Podiatry (D.P.M., D.P., or Pod.D.), and Theology (M.Div., or M.H.L.).
  • Loan proration: Requires institutions to prorate annual loan amounts in direct proportion to the percent of full-time status the student is enrolled.

Learn more information related to Federal Student Aid changes from the One Big Beautiful Bill Act.