2026-2027 One Big Beautiful Bill (OB3) Changes

Effective July 1, 2026, these federal regulations apply to all students entering a new program in 2026-2027. 

Federal Pell Grant

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

Federal Direct Subsidized and Unsubsidized Loans

• Federal Direct Subsidized and Unsubsidized Loans are prorated per credit for all part-time students. (Eligible part-time: 6 to 11.5 applicable credits.)

Federal Direct Parent PLUS Loans

*Federal Direct Parent PLUS Loans are for parents of eligible dependent students only. Students must be taking a minimum of 6 credits applicable toward their degree and meeting Federal Satisfactory Academic Progress (SAP) standards. 

• Annual Borrowing Cap: Federal Direct Parent PLUS loans for new students are limited to $20,000 per year, per student. 
• Aggregate (Lifetime) Borrowing Cap: Federal Direct Parent PLUS Loans have a lifetime aggregate maximum of $65,000 per student. 

Repayment

• Available Federal Direct Loan repayment plans are Tiered Standard and RAP (RAP not available for Parent PLUS Loans). 

Effective July 1, 2026, these federal regulations apply to all students entering a new program in 2026-2027. 

Federal Direct Unsubsidized Graduate Loans

• Federal Direct Unsubsidized Graduate Loans will now be prorated per credit for all part-time students. (Eligible part-time: 4.5 to 8.5 applicable credits.)
• Aggregate (Lifetime) Borrowing Cap: Federal Direct Unsubsidized Graduate Loans have a lifetime aggregate maximum of $100,000, less any Federal Direct Loans taken as an undergraduate student. 

Note: The Federal Direct Graduate PLUS Loan program has been eliminated. 

Repayment

• Available Federal Direct Loan repayment plans are Tiered Standard and RAP. 

Undergraduate students who borrowed Federal Direct Loans for their current program (or had a parent borrow a Federal Direct Parent PLUS Loan) before these changes take effect (July 1, 2026) will be considered legacy borrowers. They will be subject to the old regulations that were used prior to the 2026-2027 academic year, with the exception of loan proration as explained below. 

Federal Direct Loan Changes

• Federal Direct Subsidized and Unsubsidized Loans will be prorated per credit for all part-time students as of July 1, 2026. (Eligible part-time: 6 to 11.5 applicable credits.)

Legacy Status Benefits

• Continued access to Federal Direct Parent PLUS Loans with the old limits (can borrow up to Cost of Attendance, no lifetime aggregate limit on PLUS loans).

• If you have legacy status, your benefits as a legacy borrower will extend to all borrowing in the same program for 3 years (until July 1, 2029), or until you complete your program, whichever comes first. After that point you will also be subject to the new regulations effective July 1, 2026.

Repayment

• Fewer repayment plans will be available for all borrowers who take out new loans, as in loans disbursed after July 1, 2026. Tiered Standard or RAP only.
• If not taking out any new loans after July 1, 2026, borrowers will be able to continue their access to the wider set of old repayment plans (Standard, Graduated, Extended, RAP, IBR, ICR, PAYE) until the plans sunset. 
• Loan Repayment Option Flowchart (NASFAA)

Additional Changes

Federal Pell Grant Changes

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

Graduate students who borrowed before these changes take effect (July 1, 2026) will be considered legacy borrowers. They will be subject to the old regulations that were used prior to the 2026-2027 academic year, with the exception of loan proration as explained below.

Federal Direct Loan Changes

• Federal Direct Unsubsidized Graduate Loans will now be prorated per credit for all part-time students as of July 1, 2026. (Eligible part-time: 4.5 to 8.5 applicable credits.) 

Legacy Status Benefits

• Continued access to Federal Direct Graduate PLUS Loans with the current limits (can borrow up to Cost of Attendance, no lifetime aggregate limit on PLUS loans). 
• If you have legacy status, your benefits as a legacy borrower will extend to all borrowing in the same program for 3 years (until July 1, 2029), or until you complete your program, whichever comes first. After that point you will also be subject to the new regulations effective July 1, 2026.

Repayment

• Fewer repayment plans will be available for all borrowers who take out any new federal loans disbursed after July 1, 2026. Tiered Standard or RAP only.
• If not taking out any new loans after July 1, 2026, borrowers will be able to continue their access to the wider set of old repayment plans (Standard, Graduated, Extended, RAP, IBR, ICR, PAYE) until the plans sunset. 
• Loan Repayment Option Flowchart (NASFAA)