One Big Beautiful Bill Act

Changes to Federal Student Aid due to the One Big Beautiful Bill Act

The “One Big Beautiful Bill Act”, passed by Congress and signed by President Trump on July 4, 2025, introduces several major changes to federal financial aid.

The summary of changes, but we recommend students and parents review the U.S. Department of Education’s One Big Beautiful Bill Act website as well as the National Association Of Student Financial Aid Administrators (NASFAA) One Big Beautiful Bill Summary of Changes

For additional details and a broader overview of the changes affecting recipients of federal student aid.

Pell Grants

• If a student receives a scholarship or grant that fully covers their Cost of Attendance, they will no longer be eligible for Pell grant funds. 

Federal Direct Loan Programs

Rules for existing borrowers who take out loans prior to July 1, 2026

• Parent PLUS Borrowers who have a Parent PLUS Loan disbursed before July 1, 2026, while their dependent student is enrolled in a credentialed program, may continue borrowing up to the cost of attendance for either three additional academic years or the remainder of the student’s expected time to credential, whichever is shorter.
• Graduate PLUS Borrowers who have a Graduate PLUS Loan disbursed before July 1, 2026, may also continue borrowing up to the cost of attendance for three additional academic years or the remainder of their expected time to credential, whichever occurs first.

Rules for new borrowers who borrow as of July 1, 2026

Parent PLUS

• New Parent PLUS borrowers can only borrow up to $20,000 per year per dependent student.
• The total aggregate borrowing limit is $65,000 per dependent student.
• All parents combined are subject to these borrowing limits. Parents of the same dependent student cannot apply separately to exceed $20,000 annual or $65,000 total limit.

Graduate Students

• The annual Federal Direct Unsubsidized Student Loan borrowing limit remains unchanged at $20,500.
• New borrowers as of July 1, 2026, cannot request a Graduate Plus loan.  
• New Graduate student will have an aggregate limit of $100,000
• Professional student (Law, Medical and Dental) borrowers will be able to borrow up to $50,000 annually from the Direct Unsubsidized loan program with a maximum aggregate total of $200,000.  

Loan Schedule of Reduction

• Students must still be enrolled at least half-time (based on their academic level) to qualify for any federal student loans at all.
• Beginning with the fall 2026 semester, students who enroll less than full-time will have their loan eligibility prorated proportionally to their enrollment intensity.  Under the new rule, the percentage of full-time enrollment determines the percentage of the annual loan limit a student can receive. 
• Full-time enrollment is defined as 12 or more credits per semester for undergraduate students and 9 or more credits for graduate students
• The academic year is typically based on a full-time load across fall and spring.
  • An undergraduate enrolled in 12 credits in a semester (full-time) would be eligible for 50% of their annual loan limit for that term.
    • If that same student enrolls in 6 credits in a semester, they are attending at 50% of full-time status for that term, but since the full academic year is 24 credits, those 6 credits represent 25% of the annual load, so they would receive 25% of their annual loan eligibility.
    • Loan eligibility each semester is based on enrollment intensity at the time of disbursement.
    • If a student withdraws after the loan is disbursed, their spring loans maybe impacted and reduced. 

Other General Loan Information

• All new federal student loan borrowers will have a lifetime borrowing maximum of all federal student loans of $257,500, excluding borrowed Parent PLUS Loan amounts.
• New borrowers will be able to choose between two repayment plans:
  • A new standard repayment plan with fixed monthly payments and fixed terms ranging from 10 to 25 years, based on the amount borrowed 
  • The new income-based repayment plan, Repayment assistance plan (RAP). 

School Accountability

• Establishes a new accountability measure under which a program will lose Direct Loan eligibility if it fails the “low earnings outcomes” test measure 2 out of 3 years.
• Undergraduate programs: Compares the median earnings of completers 4 years after program completion with the earnings of “working adults” with only a high school degree or GED who are not enrolled in higher education. 
• Graduate programs: Compares the median earnings 4 years post-enrollment with the earnings of “working adults” with only a bachelor’s degree who are not enrolled in higher education. 
• Schools will be required to issue warnings to students if a program fails the “low earnings outcomes” 

Bottom Line

This summary reflects the University's current understanding of the One Big Beautiful Bill Act based on information available from the U.S. Department of Education. As additional federal guidance becomes available, this webpage will be updated to reflect the most current information.