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Federal Financial Aid Changes Under the One Big Beautiful Bill Act (OBBBA)
What Parents and Supporters Need to Know
The One Big Beautiful Bill Act (OBBBA) includes significant changes to the federal student financial aid and loan programs beginning with the 2026–27 academic year (after July 1, 2026). The legislation is intended to simplify the federal student loan system, encourage responsible borrowing, reduce long-term student debt, and help ensure the sustainability of federal financial aid programs for future students.
Parent PLUS Loan Changes:The law introduces new borrowing limits for loans first disbursed on or after July 1, 2026. Lifetime borrowing caps will apply, and borrowers will have simpler federal repayment plan options available. These changes are designed to encourage families to consider grants, scholarships, payment plans, and other resources before borrowing.
Loan Eligibility Based on Enrollment: Beginning with the 2026–27 academic year, students attending less than full-time may receive a prorated federal student loan amount based on the number of credit hours in which they are enrolled.
Changing a Program of Study: Students who change majors, transfer into a different academic program, or pursue a new credential should contact Student Financial Services before making the change. Depending on a student's academic progress and remaining coursework, these changes may affect federal loan eligibility and borrowing limits.
Simplified Loan Repayment: For new borrowers, the law streamlines the number of federal income-driven repayment plans. The revised repayment structure is intended to make repayment easier to understand while helping borrowers steadily reduce their loan balances over time.
Borrow Only What You Need: Although federal loans can help make college more affordable, they must be repaid. Families are encouraged to maximize grants, scholarships, work-study opportunities, and other financial resources before borrowing and to borrow only what is necessary to cover educational expenses.
FAFSA Remains the First Step: Completing the 2026-27 Free Application for Federal Student Aid (FAFSA) is the most important step in determining eligibility for federal, state, and institutional financial aid. Students should submit the FAFSA as earliest as possible to maximum consideration for which they qualify.
We're Here to Help: Student Financial Services is committed to helping students and families understand these upcoming changes and make informed decisions about paying for college. As additional guidance is released by the U.S. Department of Education, we will continue to provide updates and resources.
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