The One Big Beautiful Bill Act (OBBBA) and Financial Aid

OBBBA alters how eligibility for federal student aid is calculated and introduces changes to Pell Grant qualification rules that may take effect with the 2026–27 FAFSA.

• Some asset exemptions and income rules used in determining aid eligibility have been updated.
• Certain non-federal scholarships that cover a student’s full cost of attendance may now affect Pell Grant eligibility.

• Graduate PLUS loans will be phased out for new borrowers beginning July 1, 2026.
• New graduate students can borrow up to $20,500 per year, with a $100,000 total limit for all graduate study.
• Professional degree students (e.g., law, medicine) may borrow up to $50,000 per year with a $200,000 career aggregate limit (on top of undergraduate borrowing).

• $20,000 per year per dependent student
• $65,000 aggregate limit per student.

Loan amounts for students taking less than full-time course loads will be prorated based on actual enrollment level.

This pertains to all students, undergraduate, graduate and doctoral

• Full-time for undergraduate is 12 credit hours or more
• Full-time for graduate/doctoral is 9 credit hours or more

• New repayment plans are being introduced — including a Repayment Assistance Plan (RAP) that adjusts monthly payments based on income.
• Some existing repayment plans will be phased out over time as the new structure takes effect.

• No major immediate changes for students applying for aid today. Most current financial aid programs continue under existing rules for the 2025–26 year.
• Most changes begin for aid and loans made on or after July 1, 2026. It’s critical for students and parents to understand whether they are “new” borrowers (first borrowing after that date) because that status impacts eligibility and loan limits.

• Learn Your Borrower Status: determine whether you are a current or new borrower for federal loans — this affects what limits and rules apply.
• FAFSA Planning: stay informed about FAFSA changes and what documentation may change in the financial aid process.
• Understand Loan Options: graduate students and families who may have relied on Parent PLUS or Graduate PLUS loans should plan for alternate financing, since availability and limits are different under OBBBA.