On July 4, 2025, the One Big Beautiful Bill Act (OB3) was signed into law authorizing changes that affect all student types and became effective July 1, 2026. These changes include limits and requirements for Federal Loan funding, Federal Loan repayment options (for new and current borrowers) and Federal Pell eligibility calculations. Changes are effective for the 2026-2027 academic year. Listed below are common questions and answers. This page will be updated as more information becomes available.
蓝莓视频 defines a鈥痜ull-time academic year鈥痑s 24 credit hours for undergraduates and 18 credit hours for graduate students. A鈥痜ull-time semester鈥痠s defined as 12 credit hours for undergraduate students and 9 credit hours for graduate students.
The One Big Beautiful Bill Act (OB3) affects many areas of financial aid eligibility. Below is a summary of how students may be impacted.
Students may not receive any more than 50% of their annual loan limit each semester.鈥疶his means that if you did not borrow your loans in the fall semester, you cannot then request the totality of those loans in the spring semester. There are very few exceptions to this regulation.
Students enrolled in less than 6 credit hours are not eligible for Federal direct loans.
Undergraduate legacy students鈥痑re subject to the pre-OB3 Parent PLUS Loan rules that do not cap the annual or lifetime amounts for up to the lesser of either 3 years or their calculated expected time to credential.
Graduate legacy students鈥痗an participate in the Graduate PLUS Loan program for the lesser of 3 years or their expected time to credential and are not subject鈥痶o the OB3 aggregate loan limits.
Students may not opt out of the legacy borrower status if they otherwise qualify.
However,鈥痑ll students, legacy and non-legacy,鈥痑re subject to the Schedule of Reduction (SOR) rules which require loans to be prorated if enrolled less than full-time.
Legacy students retain their pre-OB3 eligibility for the lesser of three years, or their published program length minus time enrolled.
The鈥痯ublished program length鈥痠s defined as the minimum amount of weeks, months, or years required for a鈥痜ull-time student to complete a degree.
Examples:
Transfer credit hours鈥痑nd high school coursework being accepted toward your degree requirements can affect your calculated expected time to credential, as can attending part-time.
For example, an undergraduate student who is enrolled in 7 credit hours in the fall term will have their loans prorated. Since full-time enrollment is 12 credit hours, the enrolled credit hours are divided by the full-time enrollment and then multiplied by the loan eligibility amount.
7 credit hours 梅 12 credit hours = 58% (rounded to the nearest whole number)
Then multiply the percentage by the semester loan amount:
$2,750 x 58% = $1,595
A student who would normally have $2,750 in federal loan eligibility (half of $5,500) can only receive $1,595 federal direct loan funding when enrolled in 7 credit hours.
New spring students.鈥疭tudents attending only one term are subject to a single-term Schedule of Reduction (SOR) calculation. Federal regulations first determine the portion of the annual loan limit available for the single term and then apply any required reduction based on enrollment.
Before dropping, withdrawing from, or adding courses, students are strongly encouraged to speak with an academic advisor and financial aid counselor. Together, they can help you understand both the academic and financial impact of changing your enrollment.
Parents will be capped at $20,000 per year with a lifetime maximum limit of $65,000 in PLUS borrowing per student. This replaces the previous ability to borrow up to the full cost of attendance, minus other financial aid.
If both parents borrow on behalf of the same student, their鈥痗ombined鈥痓orrowing is capped at $20,000 per year with a lifetime maximum limit of $65,000 (without regard to amounts forgiven, repaid, cancelled or discharged).
Legacy provision for parent borrowers: 鈥疘f the student has borrowed a federal direct loan or the parent has borrowed a Parent PLUS loan before July 1, 2026, the parent is eligible to borrow under the pre-OB3 loan limits (up to the cost of attendance, minus other financial aid) for the remainder of the student鈥檚 program or three years, whichever comes first. The student must remain鈥痗ontinuously enrolled鈥痠n their current program. If they take a break in enrollment, the parent will be considered a new borrower and subject to the new loan limits.
The maximum Pell Grant amount for 2026-2027 is $7,395. Therefore, students with a SAI of 14,791 or higher are not eligible for the Pell Grant.
Students with non-federal aid (i.e., aid received from private scholarships, institutional funding, State grants, etc.) equal to or exceeding the estimated cost of attendance聽cannot also receive a Pell Grant.
Beginning with the 2026鈥�2027 award year, direct loan amounts for students enrolled less than full-time for the academic year will need to be reduced. This is referred to as the Schedule of Reduction (SOR).鈥疐ull-time enrollment is determined by semester and by the academic year, whereas, prior to OB3 regulations, the rules were limited to enrollment in a single term.
This reduction is made at the鈥痭ext scheduled disbursement鈥痠n the aid year.
Example (individual scenarios and eligibility may vary):
Prior to the spring loan disbursement, the Schedule of Reduction (SOR) is calculated.
Please be advised that federal loans have an origination fee and net funds disbursed to the student account will be slightly less than what is accepted.
New graduate students (beginning on or after July 1, 2026) will not be eligible for Grad PLUS loans.
Graduate students that borrowed Direct Loans before July 1, 2026, are eligible for Grad PLUS loans if they are continuously enrolled in the same鈥痯rogram of study鈥痑nd meet all other legacy requirements. If a student has a break in enrollment or withdraws, they will be considered a new borrower subject to the new loan limits when they re-enroll. A student will be considered a new borrower if they temporarily stop attending the current program of study to enroll in and/or complete another program.
If a student borrowed鈥痜ederal loan funds before鈥疛uly 1, 2026, and is enrolled in the鈥痵ame program of study with continuous enrollment, they are considered a legacy student and remain eligible for the pre-OB3 loan limits ($20,500 per year and $138,500 aggregate) for the remainder of their expected time to credential. Changing their program or interrupting their enrollment will affect their eligibility.