IMPORTANT UPDATES:
The One Big Beautiful Act (OBBB) was signed into law on July 4, 2025 and makes significant changes to federal financial aid programs, including new loan limits, new loan repayment options, and updated eligibility requirements, for both current and future students.
Most changes take effect July 1, 2026 for the 2026-27 academic year.
The information on this page reflects Fredonia's current understanding of these changes, as of March 2026. This page will be updated throughout the 2025-26 academic year as the U.S. Department of Education issues implementing regulations and guidance.
You are currently enrolled in an undergraduate program and will continue in the 2026-27 academic year
What's Staying the Same:
Undergraduate Loan Limits
No Change: Subsidized and Unsubsidized loan limits remain the same
- Annual: $5,500-$12,500 (based on year and dependency status)
- Total: $31,000 (dependent) or $57,500 (independent)
- U.S. Department of Education: Loan Amount Limits
What's Changing:
Parent PLUS Loan Limits
New limits Updated annual and lifetime borrowing limits apply to Parent PLUS loans - limits are per student, not per parent borrower
- Annual: $20,000 per year, per student
- Total: $65,000 per student
Action: If you do not qualify for an exception and your parent(s) plan to borrow in excess of new limits, consider a private loan.
Reduced Annual Loan Limits for Part-Time Enrollment
Limited loan eligibility: If you enroll in less-than 12 credits for a semester, the amount you can borrow for the semester may be reduced
Example: If you enroll in 6 credits for the Fall semester (half of full time), the portion of your annual loan limit attributable to the Fall will be reduced proportionally (also by half). If the amount you plan to borrow for the Fall exceeds the new limit, your Fall loan must be reduced to the new limit.
Action: If you plan to enroll part-time and your federal loans are reduced leaving a funding gap, consider a private loan.
Pell Grant Eligibility
Updated eligibility criteria: Certain types of income/assets are either included or excluded for some students, and new eligibility limitations apply
- Certain Assets Excluded: Family businesses (≤100 employees), family farms, and commercial fishing operation assets will be excluded
- Foreign Income Included: Income from foreign sources will be added to adjusted gross income (AGI)
- Student Aid Index (SAI) limitation: Students with SAI ≥ $14,790 (2x the current maximum Pell award) will not be eligible
- Other grants and scholarships limitation: Students with total grants and scholarships from non-federal sources ≥ total estimated cost of attendance will not be eligible for Pell
Action: None required
Exception for Current Students (a.k.a. "legacy" or "grandfather" provisions):
Most current students qualify for an exception: If you qualify, new Parent PLUS limits don't apply for up to three academic years
Your parent(s) may continue borrowing Parent PLUS loans under prior limits for up to 3 academic years (or the remainder of your academic program, whichever is less) if -
- you are enrolled as of June 30, 2026, and
- you or your parent(s) previously borrowed a federal loan for your academic program, and
- you remain in the same academic program through graduation
Key Detail: The OBBB does not provide exceptions for reduced annual loan limits for part-time enrollment or updated Pell Grant eligibility provisions. Both are effective July 1, 2026 for the 2026-27 academic year.
Additional Resources from StudentAid.gov
You are beginning in Fall 2026 or later
Pell Grants:
$10.5 Billion Funding Boost: maximum Pell remains $7,395 for the 2026-27 academic year
Updated Eligibility Criteria
- Certain Assets Excluded: Family businesses (≤100 employees), family farms, and commercial fishing operation assets will be excluded
- Foreign Income Included: Income from foreign sources will be added to adjusted gross income (AGI)
- Student Aid Index (SAI) limitation: Students with SAI ≥ $14,790 will not be eligible for Pell
- Other grants and scholarships limitation: Students with total grants and scholarships from non-federal sources ≥ total estimated cost of attendance will not be eligible for Pell
Federal Student Loans:
No Change: Subsidized and Unsubsidized loan limits remain the same
Undergraduate Loan Limits
- Annual: $5,500-$12,500 (based on year and dependency status)
- Total: $31,000 (dependent) or $57,500 (independent)
- U.S. Department of Education: Loan Amount Limits
Parent PLUS Loan Limits
New limits: Updated annual and lifetime borrowing limits apply to Parent PLUS loans - limits are per student, not per parent borrower
- Annual limit: $20,000 per year per student
- Lifetime limit: $65,000 total per student
Key Detail: Unless Congress subsequently changes the lifetime Parent PLUS limit, families borrowing $20,000 in each of a student’s first three academic years will only be able to borrow $5,000 in your student’s 4th year.
Recommendation: If your parents plan to borrow in excess of new Parent PLUS limits, consider a private loan.
Reduced Annual Loan Limits for Part-Time Enrollment
Limited loan eligibility: If you enroll in less-than 12 credits for a semester, the amount you can borrow for the semester may be reduced
Example: If you enroll in 6 credits for the Fall semester (half of full time), the portion of your annual loan limit attributable to the Fall will be reduced proportionally (also by half). If the amount you plan to borrow for the Fall exceeds the new limit, your Fall loan must be reduced to the new limit.
Recommendation: If you plan to enroll part-time consider a Payment Plan before making a decision regarding federal and/or private loan options.
Program Accountability:
New Requirement: All undergraduate programs in the U.S. must demonstrate graduates earn more than high school diploma holders
Students in programs with poor employment outcomes may not be able to borrow federal loans beginning with the 2030-2031 academic year.
Additional Resources from StudentAid.gov
You are currently enrolled in a graduate or professional program and will continue in the 2026-27 academic year
What's Changing:
New Annual, Aggregate, and Lifetime Total Loan Limits
Critical Change: Graduate PLUS loans are no longer available starting July 1, 2026 (most current students qualify for an exception)
| Program Type | Annual Limit | Aggregate Limit | Lifetime Maximum |
|---|---|---|---|
| Graduate | $20,500 | $100,000 | $257,500 (all undergrad, grad, and professional) |
Coming Soon: The U.S. Department of Education will issue regulations defining graduate vs. professional programs, tentatively in the Spring of 2026
Action: If you do not qualify for an exception and your program costs exceed new limits, consider a private loan.
Reduced Annual Loan Limits for Part-Time Enrollment
Graduate students must be enrolled 12 credit hours to be considered full-time for financial aid and billing purposes. For academic purposes nine credit hours constitutes a full-time course load. You must be enrolled at least half time (6 credits) in order to utilize Federal Direct Unsubsidized loans.
Limited loan eligibility for part-time students: If you enroll less-than full-time (12 credits per semester- Fall, Spring, or Summer), your annual loan limit must be reduced proportionally
Example: If you enroll half-time during the Fall semester (6 credits), the portion of your annual loan limit attributable to the Fall will be reduced by 50 percent. If the amount you plan to borrow for the Fall exceeds the new limit, your Fall loan will be reduced to the new limit.
Action: If you plan to enroll part-time and your federal loans are reduced leaving a funding gap, consider a private loan.
Coming Soon: Fredonia is evaluating current policies regarding the definition of full- and part-time enrollment for graduate and professional students while awaiting guidance from the U.S. Department of Education, tentatively in the Spring of 2026
Exception for Current Students (a.k.a. "legacy" or "grandfather" provisions):
Most current students qualify for an exception: If you qualify, you can borrow Graduate PLUS loans under prior limits for up to 3 academic years
You may continue borrowing Graduate PLUS loans under prior limits for up to 3 academic years (or the remainder of your academic program, whichever is less) if -
- you are enrolled as of June 30, 2026, and
- you previously borrowed a federal loan for your academic program, and
- you remain in the same academic program through graduation
Key Detail: The OBBB does not provide exceptions for:
- Reduced annual loan limits for part-time enrollment
Additional Resources from StudentAid.gov
You are starting a graduate or professional program in the Fall of 2026 or later
Federal Student Loans:
New Annual, Aggregate, and Lifetime Total Loan Limits
Critical Change: Graduate PLUS loans are no longer available starting July 1, 2026
| Program Type | Annual Limit | Aggregate Limit | Lifetime Maximum |
|---|---|---|---|
| Graduate | $20,500 | $100,000 | $257,500 (all undergrad, grad, and professional) |
Recommendation: If your program costs exceed these limits, consider a private loan.
Coming Soon: The U.S. Department of Education will issue regulations defining graduate vs. professional programs, tentatively in the Spring of 2026
Reduced Annual Loan Limits for Part-Time Enrollment
Graduate students must be enrolled 12 credit hours to be considered full-time for financial aid and billing purposes. For academic purposes nine credit hours constitutes a full-time course load. You must be enrolled at least half time (6 credits) in order to utilize Federal Direct Unsubsidized loans.
Limited loan eligibility for part-time students: In most cases, if you enroll less-than full-time (12 credits per semester- Fall, Spring, or Summer), your annual loan limit must be reduced proportionally
Example: If you enroll half-time during the Fall semester (6 credits), the portion of your annual loan limit attributable to the Fall will be reduced by 50 percent. If the amount you plan to borrow for the Fall exceeds the new limit, your Fall loan will be reduced to the new limit.
Coming Soon: Fredonia is evaluating current university policy regarding the definition of full- and part-time enrollment for graduate and professional students. We also expect additional guidance from the U.S. Department of Education, tentatively in the Spring of 2026
Program Accountability:
New Requirement: All graduate and professional programs in the U.S. must demonstrate graduates earn more than Bachelors degree holders in the same field
Students in programs with poor employment outcomes may not be able to borrow federal loans beginning with the 2030-2031 academic year.
Additional Resources from StudentAid.gov
You are currently in-school and haven't started repaying your loans yet
New and Updated Repayment Plans:
Simplified Repayment Plan Options: After graduation (or otherwise ceasing enrollment), you'll choose one repayment plan option for all your federal student loans
Standard Repayment Plan
- Fixed payments over 10-25 years (based on debt amount)
- Pays off loans fastest, lowest total interest
Repayment Assistance Plan (RAP)
- Income-based payments (minimum $10/month)
- Forgiveness after 30 years (360 payments)
- Good for variable income or public service careers
Income-Based Repayment (IBR)
- Only available if you borrowed prior to July 1, 2026 and do not borrow after July 1, 2026
- Payments capped at 10% of discretionary income
- Forgiveness after 20 years
Public Service Loan Forgiveness (PSLF):
PSLF continues: Current PSLF requirements continue until further notice
- Full-time work for qualifying employer (government/eligible nonprofit)
- payments made under a qualifying repayment plan
- 120 qualifying payments
Coming Soon: The U.S. Department of Education will clarify which new repayment plans qualify for PSLF, tentatively in the Spring of 2026
Additional Resources from StudentAid.gov
You're currently repaying your student loans or are in deferment/forbearance
Transition To New Repayment Plans:
Your existing federal loan terms are not changing: However, available repayment plan options are
You will receive more information about transitioning to an available repayment plan directly from your loan servicer.
If you are currently in a SAVE or PAYE repayment plan:
Critical change: Current SAVE and PAYE repayment plans are being eliminated
- Interest began accruing on August 1, 2025
- No payment requirement, but interest is accumulating
Recommendation: To avoid interest accumulation, contact your student loan servicer to select an available repayment plan as soon as possible.
Available Options after July 1, 2026:
Standard Repayment Plan
- Fixed payments over 10-25 years (based on debt amount)
- Pays off loans fastest, lowest total interest
Repayment Assistance Plan (RAP)
- Income-based payments (minimum $10/month)
- Forgiveness after 30 years (360 payments)
- Good for variable income or public service careers
Income-Based Repayment (IBR)
- Only available if you borrowed prior to July 1, 2026 and do not borrow after July 1, 2026
- Payments capped at 10% of discretionary income
- Forgiveness after 20 years
| Current Plan | Transition Deadline | Comparable Plan Options |
|---|---|---|
| SAVE | July 1, 2028 | RAP or IBR |
| PAYE | July 1, 2028 | |
| ICR | June 30, 2028 | |
| IBR | No deadline | Remain in IBR or RAP |
| Standard | No deadline | Remain in Standard/Graduated/Extended, or New Standard (repayment term determined by total debt) |
| Graduated | ||
| Extended |
Coming Soon: Department of Education will provide detailed guidance on plan transitions, payment count transfers, and RAP payment calculations, tentatively in the Spring of 2026
Parent PLUS Borrowers:
Alert: New Parent PLUS loans taken after July 1, 2026 are limited to $20,000/year and $65,000 lifetime limits per child
For some families, an older child who is currently in college may qualify for an exception (prior loan limits apply), while new loan limits apply to a younger sibling in the same academic year.
For Parent PLUS loans taken prior to July 1, 2026:
- Parent Borrowers must use the Standard Repayment Plan (no penalty for early repayment)
- May not use RAP
- May consolidate to access ICR, but must transition out of ICR by June 30, 2028
Public Service Loan Forgiveness (PSLF):
PSLF continues: Current PSLF requirements continue until further notice
Requirements:
- Full-time work for qualifying employer (government/eligible nonprofit)
- Payments made under a qualifying repayment plan
- 120 qualifying payments
Transition details:
- Payments made on SAVE/PAYE/ICR should count toward PSLF
- Must select a new qualifying plan by deadlines
- RAP and amended IBR expected to qualify (awaiting confirmation)
Recommendations:
- Continue making qualifying payments
- Submit Employment Certification Forms annually
- Monitor guidance on qualifying plans
- Plan transition before deadlines
Coming Soon: Department of Education will clarify which new plans qualify for PSLF and how payment counts transfer, tentatively in the Spring of 2026
Updated Tax Benefits:
Employer-Provided Educational Assistance (Section 127): Up to $5,250 annually tax-free, increasing with inflation starting in 2026
- Can be used for student loan repayment or tuition
- Check if your employer offers this benefit
Other notable tax changes:
- Student loan interest deduction: Up to $2,500 (income limits apply)
- Loan discharge on death/disability: Not taxable income (made permanent)
Borrower Defense and Closed School Discharge:
Biden-era regulations delayed and modified: Claims may be reviewed under different standards with potentially longer processing times.
Coming Soon: Department of Education will issue new regulations governing borrower defense claims and closed school discharges, tentatively in the Spring of 2026
Additional Resources from StudentAid.gov
- Federal Student Loans
- Understanding Student Loan Repayment
- Student Loan Repayment Plans
- Find Your Loan Servicer
- Federal Versus Private Loans
Questions?
Contact your U.S. Department of Education Assigned Loan Servicer
Who's My Student Loan Servicer?