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The One Big Beautiful Bill Act: What it Means

The One Big Beautiful Bill Act (OBBBA), signed into law on July 4, 2025, will implement significant modifications to Federal Student Aid. Loan changes are in effect as of July 1, 2026, with the Federal Pell Grant changes starting for the 2026-2027 academic year.

Impacts will apply to both undergraduate and graduate students and will include new requirements related to Federal Direct Loans, the Federal Pell Grant, and revised repayment options.

The Office of Financial Aid is reviewing guidance from the Department of Education daily. As more concrete information becomes available, we will provide information to our students and families. We recognize that these changes are impactful to a student’s account, and we remain committed to serving our population with the most up to date information possible.

Federal Pell Grant

Effective with the 2026-2027 academic year, students who receive grants or scholarships from non-federal sources that cover the full cost of attendance (as determined by the university) will not be eligible to receive a Federal Pell Grant, even if otherwise eligible for the program. In previous years, students were able to receive the Federal Pell Grant even if grants or scholarships from non-federal sources covered the full cost of attendance.

Additionally, students will no longer be eligible for a Federal Pell Grant if their Student Aid Index (SAI) is greater than twice the maximum Pell award for that year. The Maximum Pell award for the 2026-2027 academic year is $7,395. Therefore, an applicant with an SAI equal to or greater than $14,790 for the award year is ineligible for a Pell Grant.

This limit does NOT apply to students who qualify for a Pell Grant under the Special Rule (dependents of certain deceased service members and Public Safety Officers).

Federal Direct Loans

Effective July 1, 2026, there will be significant changes to the Federal Direct Loan program, especially for Graduate Students and Parent Plus Loan borrowers. We encourage you to review guidance related to loan changes using the links at the bottom of the page.

  • Undergraduate students who meet full-time requirements (12+ credits per semester totaling 24 credits per academic year) can receive 50% of their annual loan limit in the fall, and 50% of their annual loan limit in the spring.
  • Undergraduate students who do not meet full-time definitions will have their annual loan limit prorated in accordance with the number of credits they are enrolled in and its relation to full-time status. For example, a student who enrolled for 6 credits in the fall and 12 credits in the spring would be eligible for aid based on 18 credits enrolled vs 24 credits needed for full-time status per academic year.

Less than Full-time Enrollment

Undergraduate less than full-time enrollment by semester with percent of annual loan limit.
Undergraduate Enrollment by Semester Percent of the Annual Loan Limit by Semester

12

50.00%

11

45.83%

10

41.67%

9

37.50%

8

33.33%

7

29.17%

6

25.00%

1–5

0%

*The examples above assume a graduate program with a fall/spring academic year.

To learn more about institutional aid policies, please review our Undergraduate Academic Catalog.

  • Graduate Programs who meet full-time requirements (9+ credits per semester totaling 18+ credits per academic year over the course of the program) can receive 50% of their annual loan limit in the fall, and 50% of their annual loan limit in the spring.
  • Graduate students who do not meet full-time definitions will have their annual loan limit prorated in accordance with the number of credits they are enrolled in and its relation to full-time status. For example, a student who enrolled for 6 credits in the fall and 9 credits in the spring would be eligible for aid based on 15 credits enrolled vs 18 credits needed for full-time status.

*The examples above assume a graduate program with a fall/spring academic year.

Graduate Less than Full-time Enrollment

Graduate less than full-time enrollment by semester with percent of annual loan limit.
Graduate Enrollment by Semester Percent of the Annual Loan Limit by Semester

9

50.00%

8

44.44%

7

38.89%

6

33.33%

1–5

0%

A student who meets the following criteria will receive limited exception provisional status.

  • Student was enrolled in a program of study at a school as of 6/30/26;
  • Student borrowed a Direct Loan for that program of study prior to 7/1/26;
  • Student is currently enrolled at the same school in the same program of study;
  • Student has not had any break in their enrollment in the same program and the same school at any time as of 7/1/26, barring a federally approved leave of absence

Students may continue to borrow under existing regulations for the lesser of 3 academic school years OR the remaining length of time to credential, based on full-time status. This would include borrowing of the Graduate PLUS or Parent PLUS loan on behalf of the student up to the Cost of Attendance minus the amount of any other financial aid or loans received for that academic year, and pre-OBBBA loan limits. Students can NOT opt out of the limited exception provision. Pre-OBBBA limits only qualify while the student is under the limited exception status.

Expected Time to Credential

The expected time to credential of a student shall be equal to the lesser of –

  • Three academic years; or
  • The period determined by calculating the difference between –
    • The published program length for the program of study in which the individual is enrolled (based on full-time status); and
    • The period of such program of study that such individual has completed as of the date of the determination

Please refer to guidance on terminology and definitions from the Department of Education.

Before and After July 1, 2026

Impacts of the OBBBA on student borrowers before and after July 1, 2026.
Before Loan Type After

Graduate or professional students* may borrow up to $20,500 annually

Direct Unsubsidized Loans

Graduate students may borrow up to $20,500 annually, $100,000 in aggregate. Professional students* may borrow up to $50,000 annually, $200,000 aggregate

Students may borrow up to the Cost of Attendance minus Other Financial Assistance

Grad PLUS Loan

Grad PLUS is eliminated

$138,500 in subsidized and unsubsidized loans (including undergraduate loans)

Lifetime Aggregate Limit

$257,500 in Title IV loans (except Parent PLUS loans) without regard to amounts repaid, forgiven, canceled, or otherwise discharged

Not prorated for less than full-time students; limit remains the same regardless of enrollment status

Less than Full-Time Annual Limit

Less than full-time students may only borrow an amount proportional to their enrolled credit hours relative to full-time credit hours

*Currently not applicable to programs at Fairfield University

Student borrowers remain eligible for pre-OBBBA loan limits only if they meet the limited exception provisional status (as defined above) and for the period in which the limited exception is applicable.

Please refer to guidance on terminology and definitions from the Department of Education.

Before and After July 1, 2026

Impacts of the OBBBA on parent borrowers before and after July 1, 2026.
Before Loan Type After

Parents may borrow up to the Cost of Attendance minus Other Financial Assistance

Parent PLUS Loan

Parents may borrow $20,000 annually or $65,000 in aggregate (per dependent)

Parent borrowers remain eligible for pre-OBBBA loan limits only if the student meets the limited exception provisional status (as defined above) and for the period in which the limited exception is applicable.

Please refer to guidance on terminology and definitions from the Department of Education.

Repayment

The One Big Beautiful Bill Act implemented new provisions regarding student and parent repayment options. Any loan that is disbursed on or after July 1, 2026, will be subject to the new repayment options. These new repayment plan options are the Repayment Assistance Plan (RAP) or the tiered standard plan. Please refer to the Federal Student Aid website for more information on which repayment options are available to you depending on your circumstances.

Disclaimer: Please note, current guidance will not be set until final regulations are issued by the Department of Education. Students may need to research Private Student Loan borrowing as part of their academic program.

OBBBA Helpful Resources

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