Federal Student Aid Changes with The One Big Beautiful Bill Act

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What does this mean for students and families?

Some of the key changes that affect our students and families are as follows:

Pell Grant Changes

• Foreign income must be included in the Adjusted Gross Income used to calculate Pell Grant eligibility.
• 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.
• Prevents students from receiving Pell Grants if their SAI exceeds twice the maximum Pell Grant award.

Federal Student Loan Changes

Loan Reduction

Effective for the 2026-2027 aid year, the loan amounts for students who are enrolled less than full-time in any given semester are subject to a reduction of the loan amount for that term. 

What this means:

• The amount of federal student loans a student can receive is adjusted based on how many credits they are taking during the academic year using the following formula:

(Number of credits enrolled for academic year ÷ 24) x 100  = annual loan limit percentage

• Dropping or withdrawing from classes after your loans have disbursed may result in your federal loans being reduced or recalculated. If you are enrolled in fewer credits than originally reported, this could reduce your loan eligibility and create a balance owed to the college.
• If a student enrolls in fewer classes, they may qualify for a smaller loan amount.
• Loan limits for students enrolled less than full-time are reduced
• Borrowers enrolled less than half-time are still ineligible for Federal Direct loans
• For single-term loans, students may not receive more than half the annual loan limit which uses the following formula:

Enrollment credits ÷ 24 credits = Percentage of annual loan eligibility

For more information on Loan Reduction, check out our FAQ page.

 

Parent Plus Loan Annual Aggregate Loan Limit Changes

• Parents may borrow $20,000 per year per dependent student with a $65,000 aggregate limit per dependent student.
• Legacy Provision: If a borrower has a Federal Direct Loan made before July 1, 2026, while enrolled in a program of study, the borrower can continue to borrow from the program for the shorter of 3 academic years or the remainder of their expected time to credential. For whichever timeframe is shorter, a parent may borrow under the current Parent PLUS Loan guidelines which include borrowing up to the student’s unmet Cost of Attendance with no aggregate limit.

 

Loan Repayment Changes

Loan repayment options will vary for current borrowers, who have no new loans after July 1, 2026, and new borrowers who have one or more loans made after July 1, 2026. The chart below outlines available repayment options:

All information contained herein is tentative, pending final regulatory guidance from the US Department of Education.

For More information about The One Big Beautiful Bill Act, please check out this short video:

 

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Next Steps and Additional Information

For further information or updates, please refer to the Federal Student Aid website: One Big Beautiful Bill Act.

Learn more about financial aid through informative video segments geared toward students and parents.