Due to the enactment of the One Big Beautiful Bill on July 4, 2025, there are several changes to federal student aid programs that will go into effect for the 2026-27 academic year.
This guidance may change as additional information becomes available. Please refer to Federal Student Aid for official information.
Also, NASFAA has published a useful handouts for new Federal Direct Parent PLUS borrowers and one for current borrowers that may prove helpful. A handout for current graduate students is also available.
- Those students receiving non-federal grants and/or scholarships to cover their cost of attendance will no longer be eligible to receive the Federal Pell Grant.
- Students whose SAI is a minimum of twice the Pell Grant award for the given award year will be ineligible for Pell.
- For example, if the max Pell amount for 2026-27 is $7,395, and a student has an SAI index of 14,790 or greater, the student will not be eligible for a Federal Pell Grant.
- The SAI calculation will exempt family farms and family-owned small business assets.
- Foreign earned income exclusion will be included in determining if a student is eligible for the Pell Grant.
- Parent PLUS borrowing will be limited to $20,000 per academic year per dependent student no matter how many parents borrow a PLUS Loan.
- Subject to proration based on enrollment status
- Aggregate borrowing is limited to $65,000 per dependent student regardless of whether any loans were forgiven, repaid, canceled or discharged.
- Legacy provision - guidance is evolving
- For a dependent student enrolled in an eligible degree-seeking program prior to July 1, 2026 and a parent has borrowed a Direct Loan for the same program.
- A parent may continue to borrow up to the cost of attendance for the same program of study. This flexibility is for 3 academic years or the end of the student’s degree, whichever comes first.
- If the student withdraws, takes a leave of absence or is no longer enrolled, the parent would be ineligible to borrow under this provision.
- Effective July 1, 2026, this loan program is discontinued and will not be available to new borrowers
- Legacy borrowing - guidance is evolving. Students who borrowed Federal Direct Loans for their graduate program prior to July 1, 2026, may qualify for a legacy exception if:
- The student remains in the same graduate program in which they previously borrowed and
- Completes their graduate program within 3 academic years or until they complete their program, whichever comes first.
- Subject to reduction if less than full-time (9 credits) per semester
- Students who are not enrolled full-time each semester will be subject to federal loan reduction based on their enrollment. A student must, at minimum, be enrolled half-time in courses required for their degree per semester in order to be eligible for a Direct Loan.
- Parent PLUS Loans are not subject to proration based on enrollment status.
- $257,500 lifetime borrowing limit on all combined undergraduate, graduate, and professional loans excluding Direct Parent and/or Graduate PLUS Loans.
- Direct Unsubsidized Loans for a Graduate Student is capped at $100,000.
- For those who were enrolled in a program of study and borrowed prior to July 1, 2026 may continue to borrow under prior loan limits for 3 academic years or completion of the program, whichever comes first.
- If a student withdraws from the college or takes a leave of absence, they forfeit their legacy eligibility.
- If a student changes programs, the legacy provision is forfeited
To help cover any remaining balance or gap after institutional and federal financial aid has been applied, you may want to consider the following:
- Interest-free monthly payment plan
- Outside scholarships
- Private educational loans
- Assistantships (graduate students only)