Federal Student Aid Changes Under the One Big Beautiful Bill

Federal Direct Graduate PLUS Loans will no longer be available to new borrowers beginning July 1, 2026. Current graduate students who qualify for continued borrowing under the law’s legacy provisions may be able to continue borrowing for a limited period, but new borrowers after that date will not have access to Graduate PLUS loans. 

Parent PLUS Loans will remain available, but new borrowing limits will apply beginning July 1, 2026. Parents will be limited to $20,000 per year per dependent student, with a $65,000 aggregate limit per student. Under current rules, parents may generally borrow up to the student’s cost of attendance minus other aid, so this is a significant change for some families. Students with an existing Direct Loan may continue borrowing under previous provisions for three years or program completion (whichever is less). Student must remain in the same major (academic program of study) to be eligible under this provision. 

For graduate students, the Federal Direct Unsubsidized Loan will continue to be available and the limit is expected to remain $20,500, but new aggregate borrowing caps will apply. The graduate cap will be $100,000 (not including loans taken as an undergraduate).

Beginning with 2026–2027, federal annual loan limits for students enrolled less than full time will be reduced proportionally based on enrollment level. The Department has stated that schools will be required to use a federal reduction schedule once finalized. 

Beginning with the 2026–2027 award year, students whose non-federal grants and scholarships fully cover their cost of attendance will no longer be eligible for a Federal Pell Grant. Federal guidance also reflects additional Pell eligibility changes, including treatment of foreign earned income exclusion and an SAI-based cutoff tied to twice the maximum Pell award for the year. 

Federal repayment options for new borrowers will change beginning July 1, 2026, and implementation will continue over time. The Department has already published guidance on some provisions, and additional federal details are still being released. 

No. These changes do not affect federal financial aid for the 2025–2026 academic year. 

Graduate students may still be eligible for Federal Direct Unsubsidized Loans, subject to federal annual and aggregate limits. However, Graduate PLUS Loans will no longer be available to new borrowers beginning July 1, 2026. 

Yes, but new annual and aggregate caps are scheduled to apply beginning July 1, 2026. 

Some currently enrolled borrowers may qualify for limited legacy protections, but eligibility depends on factors such as whether a Direct Loan was disbursed before July 1, 2026, whether the student remains in the same program, and whether the student continues enrollment without losing eligibility. 

Yes. Beginning in 2026–2027, annual federal loan eligibility for less-than-full-time students is expected to be reduced proportionally based on enrollment status.