One Big Beautiful Bill Act
The One Big Beautiful Bill Act, signed into law on July 4, 2025, introduces significant changes to federal student aid programs under Title IV.
The new provisions will affect all types of students—current and prospective, undergraduate and graduate—with implementation scheduled for July 1, 2026.
Some aspects of the law are already defined, while others still require clarification from the U.S. Department of Education.
This information is a summary of the proposed changes. As official guidance is released, we will update this page to provide the most accurate information available. Final rules will be published in Spring 2026.
Pell Grants
Effective July 1, 2026
| Topic | Change |
|---|---|
| Students with High SAI | Students whose SAI exceeds twice the maximum Pell Grant award amount are not eligible for the Pell Grant. |
| 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. |
| Foreign Income and Pell Eligibility | Requires that foreign income be included in the AGI used to calculate Pell Grant eligibility |
Loan Proration Based on Enrollment
Effective for loans made during the 2026-2027 award year.
- Requires institutions to prorate annual loan amounts in direct proportion to the percent of full-time status the student is enrolled.
Federal Loan Program Lifetime Loan Limits
| Borrower Type | Change |
|---|---|
| New Borrowers as of July 1, 2026 | $257,500 lifetime borrowing limit on all federal student loans (undergraduate, master’s, doctorate), 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 Borrowers | 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 of $138,500 for 3 academic years or the remainder of their expected time to credential, whichever is less. |
Undergraduate Loans
Effective July 1, 2026
| Topic | Change | Provision |
|---|---|---|
| Parent PLUS Annual & Aggregate Loan Limits | – All parents (combined) may borrow $20,000 per year per dependent student. – The aggregate limit is capped at $65,000 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 made 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. |
Graduate Loans
Effective July 1, 2026
| Topic | Change | Provision |
|---|---|---|
| Graduate PLUS Loan Program | Graduate PLUS loan program is eliminated. | Legacy Provision: If a borrower has a Federal Direct Loan made before July 1, 2026, while enrolled in a program of study, 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 Limit | – 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, not including amounts borrowed as an undergraduate. | Legacy Provision: If a borrower has a Federal Direct Loan made 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. |