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)

(Updated 7/29/2026)

Part of the U.S. Department of Education’s professional degree definition contained in the Reimagining and Improving Student Education (RISE) Final Rule has been preliminarily stayed due to consolidated cases Nos. 26-1780, 26-1941 of the U.S. District Court for the District of Columbia.

As a result, some degrees previously classified as graduate degrees, and subject to the Federal Direct Unsubsidized Loan limit of $20,500 per award year, are (as of June 24, 2026) temporarily reclassified as professional degrees, and subject to the Federal Direct Unsubsidized Loan limit of $50,000 per award year. Aggregate loan limits will also be affected accordingly. 

Warning: This classification may revert or change as litigation in the case proceeds. The U.S. Department of Education may later require Molloy University to return some or all of the Federal Direct Unsubsidized Loan disbursed under this temporary/interim reclassification, dependent on the Court's final ruling. If that is the case, you will be left with a balance of the returned amount which you will owe to Molloy University. Please keep this in mind if accepting the larger Federal Direct Unsubsidized Loan. 

More information on the situation at FSA Partners website: Electronic Announcement GENERAL-26-42.

Interim List of Programs OFFERED BY MOLLOY UNIVERSITY Which Will Be Treated as Granting Professional Degrees as a Result of Court Order for the Duration of the Court’s Stay: 

• Speech-Language Pathology/Pathologist (SLP)
• Registered Nursing/Registered Nurse (MSN)
• Nursing Practice (DNP)

Alternative Loan Options

Private Student Loans: In addition to searching for private loans through neutral lender comparison sites ELMSelect and Sparrow, the local Ocean Financial Federal Credit Union offers student loans to Molloy University students. 

Graduate students who began their program before the 26-27 award year (before Summer 2026 semester) also have the option of Federal Direct Graduate PLUS Loans.