FAFSA & financial aid eligibility changes

Learn how the changes affect you

Changes include limits and requirements for Federal Loan funding, Federal Loan repayment options (for new and current borrowers), and Federal Pell eligibility calculations. These changes will be effective for the 2026-27 academic year, and do not impact the 2025-26 year.

The reforms brought on by the One Big Beautiful Bill Act aim to reduce excessive borrowing, simplify repayment, improve repayment transparency, and expand access to career-focused education.  This does mean that students and families will need to plan carefully.  In addition to financial aid program changes, this bill also makes updates to the need analysis used when completing the FAFSA.  For example, the provision to reinstate exemptions of family farm and family owned small business assets from the calculation.

Information below may be updated and refined pending issuance of final regulatory text by the Department of Education. We will update this page as that text becomes available. Additional information is available at One Big Beautiful Bill Act Updates | Federal Student Aid.

Undergraduate Student Changes

Federal Direct Loan Programs

• Parent PLUS Loan Annual & Aggregate Limit
  • 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).
  • Legacy Provision: If a borrower has a Parent 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.
• Federal Loan Program Lifetime Loan Limits
  • $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 Parent PLUS borrowed on their behalf for education expenses).
  • 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 3 academic years or the remainder of their expected time to credential, whichever is less.
• Schedule of Reduction
  • Students enrolled less than full-time will have their federal loans prorated to match their enrollment.
  • For example: A student who is enrolled 6 credits in Fall and 6 credits in Spring is enrolled 50% each term. Their loans will be prorated to 50% of their annual eligibility. If the student is eligible for $7,500 ($3,750 per term) at full-time for the two semesters combined, then their prorated amount will be reduced to $3,750 ($1,875 per term) to reflect their half-time enrollment.
• Legacy Provision
  • Time to completion example:
    • The student is in an undergraduate program that has a published program length of 4 years.
    • The student completes their first year at the end of 2025-26 and is scheduled to return for their second year in 2026-27.
    • According to the published program length, they should be enrolled:
      • 2025-26 – Year 1
      • 2026-27 – Year 2
      • 2027-28 – Year 3
      • 2028-29 – Year 4 (graduates)
    • The student's parents borrowed $20,000 in parent PLUS funds for the 2025-26 academic year.

Pell Grant Eligibility

• Foreign Income
  • Requires that foreign income be included in the AGI used to calculate Pell Grant eligibility.
• Full Cost of Attendance Scholarships/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 Student Aid Index
  • Prevents students from receiving Pell Grants if their Student Aid Index (SAI) exceeds twice the maximum Pell Grant award.

Graduate Student Changes

• Graduate PLUS Loan Program
  • This program is ending, effective July 1, 2026, and will no longer enroll new borrowers.
  • Legacy Provision: If a borrower has a Grad PLUS loan made before July 1, 2026, while enrolled in a credentialed program, the borrower can continue to borrow from the program for 3 academic years or the remainder of their expected time to credential, whichever is less.
• Graduate & Professional Annual & Aggregate Loan Limits
  • 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).
  • While the underlying concept of a professional program is not new, the creation of loan limits based on whether a program is professional versus graduate level is new. The law and accompanying regulations define what is considered professional for these new loan limits. Professional degrees are limited to defined programs in: 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.), Clinical Psychology (Psy.D. or Ph.D.), and Theology (M.Div., or M.H.L.
  • Legacy Provision: If a borrower has a Direct Unsubsidized Loan made before July 1, 2026, while enrolled in a credentialed program, the borrower can continue to borrow under current loan limits for 3 academic years or the remainder of their expected time to credential, whichever is less.
• Federal Loan Program Lifetime Loan Limits
  • $257,500 lifetime borrowing limit on all federal student loans, including Graduate PLUS loan borrowing but excluding borrowed Parent PLUS loan amounts (in the case of a dependent student who had Parent PLUS borrowed on their behalf for education expenses).
  • 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 3 academic years or the remainder of their expected time to credential, whichever is less.
• Schedule of Reduction
  • Students enrolled less than full-time will have their federal loans prorated to match their enrollment.
  • For example: A graduate student who is enrolled 4 credits in Fall and 4 credits in Spring is enrolled 50% each term. Their loans will be prorated to 50% of their annual eligibility. If the student is eligible for $20,500 ($10,250 per term) at full-time for the two semesters combined, then their prorated amount will be reduced to $10,250 ($5,125 per term) to reflect their half-time enrollment.
• Legacy Provision
  • Time to completion example: The student is enrolled a graduate program that has a published program length of 4 years. The student is admitted for the spring 2026 semester and attends one term in the academic year (he is not a transfer student who attended another institution). According to the published program length, he should be enrolled:

Last updated: June 23, 2026