Federal Student Aid Changes

Federal Student Aid Changes Coming in 2026-2027 

What’s changing on July 1, 2026 

Congress passed the One Big Beautiful Bill Act (OBBBA) on July 3, 2025, and it was signed into law on July 4, 2025. This legislation makes significant changes to federal student loans, grants, and repayment options beginning July 1, 2026 for the 2026-27 academic year. 

New federal loan rules for all borrowers 

Enrollment-based loan proration: 

New restrictions beginning with the 2026-27 academic year for all student loan borrowers: 

• If you enroll less than full time, your federal loan amounts will be prorated based on your number of credit hours. (You must still be registered for 6 credit hours to receive federal loans.) 

• Changes to your enrollment status after a loan disbursement—such as dropping or withdrawing from courses—may affect your loan eligibility and may cause adjustments to your current semester and/or future awarded loans. These adjustments could lead to a balance on your account.  Please consult with Financial Aid prior to making schedule changes.   

• This applies to Direct Subsidized and Unsubsidized Loans. 

• This enrollment proration does not apply to Federal Parent PLUS loans. 

EXAMPLE: 

2025-2026 = Taking 6 credits = $5,500 in Federal Student Loan Eligibility divided in half. $2,750 for Fall and $2,750 in Spring 

2026-2027 = Taking 6 credits = $2,750 in Federal Student Loan Eligibility divided in half. $1,375 for Fall and $1,375 in Spring. 

Parent PLUS loan updates:  

• Federal Parent PLUS loans are limited to cost of attendance minus other aid. Beginning with the 2026-27 academic year, parents may borrow up to $20,000 per year and up to $65,000 lifetime Max for each dependent undergraduate. 

• Parent borrowers who took out a PLUS Loan for a student before July 1, 2026, and whose student continues in the same program may keep borrowing under the old PLUS rules for up to 3 years, or the student’s remaining expected time to credential, whichever is less. 

Repayment plan changes: 

Beginning July 1, 2026, new loans will offer only two repayment options: 

1. Standard Repayment Plan 

1. Repayment Assistance Plan (RAP) 

• Income‑based 

• Offers loan forgiveness after a required number of consistent payments 

Students with existing federal loans will keep their current repayment plan options. 

Pell grant & other eligibility changes:  

• Students with a Student Aid Index (SAI) that is more than twice the maximum Pell Grant amount will no longer qualify for Pell. 

• Students whose scholarships or grants already cover the full Cost of Attendance may not receive additional Pell funding. 

• If you or any FAFSA contributors have foreign income, all foreign income must be included in the Adjusted Gross Income (AGI) used for Pell eligibility calculations.