Important Changes for 2026-2027

The One Big Beautiful Bill (OB3) Act was signed into law by Congress on July 4, 2025, and will result in significant changes to federal student aid programs beginning July 1, 2026, for the 2026-27 academic year and beyond. The financial aid and scholarship department is diligently monitoring guidance from the U.S. Department of Education, and we are committed to providing optimum support to students and families throughout this transition. This page is for informational purposes only and is based on the current understanding of the One Big Beautiful Bill Act’s purposed implementation by the U.S. Department of Education. This information is subject to change pending final regulatory text. Please visit studentaid.gov for the latest updates and answers to any questions regarding the One Big Beautiful Bill Act.

Key changes to be aware of for the 2026-27 year include:

Federal Pell Grant Program

CHANGE: Students who receive grants or scholarships from non-federal sources (institutional, state, or private) that cover their entire cost of attendance (COA) are ineligible to receive a Pell Grant, even if otherwise eligible for the program.

CHANGE: Students with an SAI equal to or greater than 14,790 (twice the maximum Pell Grant) are ineligible to receive a Pell Grant.

Federal Direct Loan Program

CHANGE: Annual loan amounts must be prorated in direct proportion to the student enrolled credit load. This federal requirement is called the Schedule of Reduction (SOR). Students will be provisionally offered the maximum amount of Federal Direct Loan funding (contingent on their eligibility) per year based on full-time enrollment. If you are enrolled less than full time at any point during the semester, your federal loan amounts will be proportionally reduced based on your enrollment status. This is a very important change that you must understand, because dropping a course may result in a reduction of your next loan disbursement or partial repayment of a student loan that has already been disbursed to you.

Note: Minimum of half-time enrollment is required.

Schedule of Reduction Examples

Dependent Undergraduate — Even Split

Registered
Fall Hours

Registered
Spring Hours

Percentage of
FT Enrollment

Annual Loan
Eligibility

Final Annual
Loan Amount

12

12

24/24 = 100%

$5,500

$5,500

9

9

18/24 = 75%

$5,500

$4,125

6

6

12/24 = 50%

$5,500

$2,750

3

3

6/24 = 25%

$5,500

$0

Note: This example uses the first year (freshman) annual loan maximum of $5,500. Visit studentaid.gov > Loan Limits to view annual loan limits for all careers. You must be enrolled at least halftime (50% of full-time enrollment) to be eligible for a federal loan.

Dependent Undergraduate — Uneven Split

Registered
Fall Hours

Registered
Spring Hours

Percentage of
FT Enrollment

Annual Loan
Eligibility

Final Annual
Loan Amount

15

9

24/24 = 100%

$5,500

$5,500

18

6

24/24 = 100%

$5,500

$5,500

3

12

15/24 = 63%

$5,500

$3,465*

12

3

15/24 = 63%

$5,500

$2,750**

*Student would receive $0 for Fall and $3,465 in Spring. They can borrow up to the full final annual loan amount because Spring is the last term of the Scheduled Academic Year.

**Student would receive $2,750 in Fall and $0 in Spring. They can only receive 50% of the eligible loan amount in Fall.

Independent Undergraduate — Even Split

Registered
Fall Hours

Registered
Spring Hours

Percentage of
FT Enrollment

Annual Loan
Eligibility

Final Annual
Loan Amount

12

12

24/24 = 100%

$9,500

$9,500

9

9

18/24 = 75%

$9,500

$7,125

6

6

12/24 = 50%

$9,500

$4,750

3

3

6/24 = 25%

$9,500

$0

Note: This example uses the independent, first year (freshman) annual loan maximum of $9,500.

Independent Undergraduate — Uneven Split

Registered
Fall Hours

Registered
Spring Hours

Percentage of
FT Enrollment

Annual Loan
Eligibility

Final Annual
Loan Amount

15

9

24/24 = 100%

$9,500

$9,500

18

6

24/24 = 100%

$9,500

$9,500

3

12

15/24 = 63%

$9,500

$5,985*

12

3

15/24 = 63%

$9,500

$4,750**

*Student would receive $0 for Fall and $5,985 in Spring. They can borrow up to the full final annual loan amount because Spring is the last term of the Scheduled Academic Year.

**Student would receive $4,750 in Fall and $0 in Spring. They can only receive 50% of the eligible loan amount in Fall.

Graduate Student Annual Loan Limit

The chart demonstrates how your annual Direct Unsubsidized Loan will be adjusted based on enrollment in a reduced number of credits.

Academic Year
Combined Course
Load (Credits)

Loan Limit
Percentage

Estimated Dollar
Amount of Loan

18

100%

$20,500

17

94%

$19,270

16

89%

$18,245

15

83%

$17,015

14

78%

$15,990

13

72%

$14,760

12

67%

$13,735

11

61%

$12,505

10

56%

$11,480

9

50%

$10,250

Note: You must be enrolled in 9 credits per semester (18 credits per academic year) to be considered full-time enrollment as a graduate student.

Graduate — Even Split

Registered
Fall Hours

Registered
Spring Hours

Percentage of
FT Enrollment

Annual Loan
Eligibility

Final Annual
Loan Amount

12

12

24/18 = 100%

$20,500

$20,500

9

9

18/18= 100%

$20,500

$20,500

6

6

12/18 = 67%

$20,500

$13,735

3

3

6/18 = 33%

$20,500

$0

Note: $20,500 is the Annual Loan Eligibility Maximum for each year of a student’s graduate program.

Graduate — Uneven Split

Registered
Fall Hours

Registered
Spring Hours

Percentage of
FT Enrollment

Annual Loan
Eligibility

Final Annual
Loan Amount

15

9

24/18 = 100%

$20,500

$20,500

12

6

18/18= 100%

$20,500

$20,500

3

12

15/18 = 83%

$20,500

$17,015*

9

3

12/18 = 67%

$20,500

$10,250**

*Student would receive $0 for Fall and $17,015 in Spring. They can borrow up to the full final annual loan amount because Spring is the last term of the Scheduled Academic Year.

**Student would receive $10,250 in Fall and $0 in Spring. They can only receive 50% of the eligible loan amount in Fall.

CHANGE: Program will be eliminated.

Legacy Provision: If a borrower has a Federal Direct Loan disbursed before July 1, 2026, while enrolled in a program of study, the borrower can continue to borrow for 3 academic years or the remainder of their expected time to credential, whichever is less.

CHANGE: Caps annually at $20,500

Legacy Provision: If a borrower has a Federal Direct Loan disbursed before July 1, 2026, while enrolled in a program of study, the current loan limits continue to apply for 3 academic years or the remainder of their expected time to credential, whichever is less.

CHANGE: Caps annually at $50,000

Legacy Provision: If a borrower has a Federal Direct Loan disbursed before July 1, 2026, while enrolled in a program of study, the current loan limits continue to apply for 3 academic years or the remainder of their expected time to credential, whichever is less.

CHANGE: Caps at $100,000

Legacy Provision: If a borrower has a Federal Direct Loan disbursed before July 1, 2026, while enrolled in a program of study, the current loan limits continue to apply for 3 academic years or the remainder of their expected time to credential, whichever is less. 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.

CHANGE: Caps at $200,000

Legacy Provision: If a borrower has a Federal Direct Loan disbursed before July 1, 2026, while enrolled in a program of study, the current loan limits continue to apply for 3 academic years or the remainder of their expected time to credential, whichever is less. 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.

CHANGE: $257,500 limit on all federal student loans, excluding Parent PLUS loans.

Legacy Provision: If a borrower has a Federal Direct Loan disbursed 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.

CHANGE: 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 the student or parent borrower has a Federal Direct Loan disbursed before July 1, 2026, while the dependent student is enrolled in a program of study, 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.

FAFSA Data/Need Analysis

CHANGE: Exempts family farm and family-owned small business assets from the SAI calculation and expands asset exemptions to family-owned commercial fisheries.

CHANGE: Requires foreign income be included in the AGI used the calculate Pell Grant eligibility.

Definitions:

New borrower:
A student with no loans taken out prior to July 1, 2026, or all loans taken out during that time have been paid in full

Active or Current borrower:
A student is enrolled in program of study at an institution as of June 30, 2026; and a direct loan was made for such program of study prior to July 1, 2026, which has not been paid off

Aggregate Loan Limit:
Refers to the maximum amount a student can borrow in specific, cumulative unsubsidized loans for their program.

Lifetime Loan Limit:
A capped debt amount a borrower can have of all federal student loan programs combined (undergraduate, graduate, professional).

Legacy Provision:
Regarding student loans, the legacy provision acts as a “grandfather clause”. It allows borrowers with existing Federal Direct Loans disbursed before July 1, 2026, to continue borrowing under old rules for up to 3 years or until they finish their program.

Professional Student:
A student enrolled in a program of study that awards a professional degree upon completion of the program.

Professional Degree:
Degree that signifies both completion of the academic requirements for beginning practice in a given profession, and a level of professional skill beyond that normally required for a bachelor’s degree; is generally at the doctoral level, and requires at least two years of post-baccalaureate level coursework; generally requires professional licensure to begin practice; and includes a four-digit program CIP code in the same intermediate group as the following fields:

  • 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.)
  • Theology (M.Div., or M.H.L.)
  • Clinical Psychology (Psy.D. or Ph.D.)

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