Financial Aid Changes for 2026-2027

Learn about recent financial aid changes and how they may affect your financial aid and planning.

The One Big Beautiful Bill Act (OBBBA) was signed into law by Congress on July 4, 2025, and will result in changes to federal student aid programs beginning July 1, 2026, for the 2026-27 academic year.

The information on this page is subject to change as additional guidance becomes available. The updates highlighted here reflect those most relevant to Warner students but do not represent a comprehensive list of all changes.

Visit Studentaid.gov for additional details and to view scenarios that illustrate how the OBBBA loan limit and repayment changes may affect student borrowers and help you plan for college costs.

For questions regarding your situation, please contact Student Financial Services.

Federal Programs

Federal Loan Reduction/Proration

What has changed?
– Federal loans are now treated as annual loans based on your total enrollment for the academic year (24 credits).
– Schools must reduce loan amounts based on the percentage of credits you are enrolled in.
– Effective for loans disbursed starting in the 2026–2027 academic year.
– Applies to Subsidized, Unsubsidized and Grad Plus loans.

What does this mean?
Undergraduate
– Full-time enrollment is 12 or more credits per semester. If you take fewer than 12 credits, your federal loan amount will be reduced.
– If your enrollment changes during the year, your remaining loan funds may be adjusted in the next semester. (Students who are enrolled in less than 24 credits fall/spring combined will see a reduced loan amount in their second semester.)

Graduate
– Full-time enrollment is 9 or more credits per semester. If you take fewer than 9 credits, your federal loan amount will be reduced.
– If your enrollment changes during the year, your remaining loan funds may be adjusted in the next semester. (Students who are enrolled in less than 18 credits fall/spring combined will see a reduced loan amount in their second semester.)

Federal Pell Grant Eligibility

What has changed?
– Students who receive grants or scholarships from non-federal sources that cover their full cost of attendance are ineligible to receive a Pell Grant.
– Students are no longer eligible for Pell Grant when a student’s Student Aid Index (SAI) equals or exceeds twice the maximum Pell award.

What does this mean?
– The maximum Pell grant for the 2026-2027 academic year is currently set at $7,395.
– Students with an SAI greater than or equal to $14,790 are ineligible.

Parent PLUS Loans

What has changed?
– Eligible parents may borrow a maximum of $20,000 per aid year per dependent student.;
– Per student aggregate loan limit of $65,000 (without regard to amounts forgiven, repaid, canceled, or discharged).
– Parents borrowing on behalf of undergraduate students may see changes in borrowing limits or eligibility.
– This could impact how families plan to cover remaining education costs.

What does this mean?
– Parents will face new limits on how much they can borrow, which could affect eligibility and reduce available loan funding per student.
– Families will need to adjust how they plan and pay for remaining college costs, especially after reaching the new annual or lifetime limits.

Legacy Provision
If the student or parent borrower has a Federal Direct Parent PLUS Loan disbursed before July 1, 2026, while the dependent student is enrolled in a program of study, the parent can continue to borrow under current loan limits for three (3) academic years or the remainder of their dependent student’s expected time to credential, whichever is less.

NASFAA Facts Sheets
– Current Parent Borrowers
– New Parent Borrowers

Graduate PLUS Loan Program

What has changed?
Program will be eliminated July 1, 2026.

What does this mean?
– Changes to this program could affect your ability to borrow additional funds beyond standard loan limits.
– In some cases, borrowing through this program may be reduced or require different eligibility criteria.

Legacy Provision
– If a borrower has a Federal Direct Graduate PLUS Loan disbursed before July 1, 2026, while enrolled in a program of study, the borrower can continue to borrow for three (3) academic years or the remainder of their expected time to credential, whichever is less.
– This eligibility is subject to loan reduction if the borrower is enrolled in less than 18 credits during the fall or spring terms.

NASFAA Fact Sheets
– What Graduate Students Need to Know
– What Health Professions Students Need to Know
– What Professional Students Need to Know

Graduate Annual & Aggregate Loan Limit

What has changed?
– Caps annually at $20,500.
– Caps at $100,000.

What does this mean?
– Graduate students may see new limits on how much they can borrow per year and overall.
– You may need to explore additional funding sources if federal loan amounts are reduced.

Legacy Provision
– If a borrower has a Federal Direct Loan disbursed before July 1, 2026, while enrolled in a program of study, the current loan limits continue to apply for three (3) academic years or the remainder of their expected time to credential, whichever is less.
– Does not include amounts borrowed as an undergraduate.
– Borrowers who are both graduate and professional students at some point in their educational careers may only borrow up to $200,000 in total for graduate and professional school.

NASFAA Fact Sheets
– What Graduate Students Need to Know
– What Health Professions Students Need to Know
– What Professional Students Need to Know

Professional Annual & Aggregate Loan Limit

What has changed?
– Caps annually at $50,000.
– Lifetime cap of $200,000.

What does this mean?
– If you are in a professional program (law, medicine, etc.), both yearly and total borrowing limits may be adjusted.
– This could impact how much funding is available each year and across your full program.

Legacy Provision
– If a borrower has a Federal Direct Loan disbursed before July 1, 2026, while enrolled in a program of study, the current loan limits continue to apply for three (3) academic years or the remainder of their expected time to credential, whichever is less.
– Does not include amounts borrowed as an undergraduate.
– Borrowers who are both graduate and professional students at some point in their educational careers may only borrow up to $200,000 in total for graduate and professional school.

NASFAA Facts Sheet
– What Graduate Students Need to Know
– What Health Professions Students Need to Know
– What Professional Students Need to Know

Federal Loan Program

What has changed?
Effective July 1, 2026, there will be a $257,500 limit on all federal student loans, excluding Parent PLUS and Graduate PLUS loans.

What does this mean?
– There may be new caps on the total amount you can borrow over your lifetime.
– If you plan to borrow for multiple degrees, you may need to budget more carefully to avoid hitting the limit.

Legacy Provision
If a borrower has a Federal Direct Loan disbursed before July 1, 2026, while enrolled in a credentialed program, the borrower can continue to borrow under current loan limits for three (3) academic years or the remainder of their expected time to credential, whichever is less.

FAFSA Data/Needs Analysis (What Counts Toward Aid)

FAFSA Asset Exemptions

What has changed?
Exempts family farm and family-owned small business assets from the SAI calculation and expands asset exemptions to family-owned commercial fisheries.

What does this mean?
FAFSA asset exemptions determine which of a family’s financial resources are excluded from the Student Aid Index (SAI) formula, thereby potentially increasing eligibility for financial aid. Assets excluded from the FAFSA calculation include:
– Family Farm Assets
– Family-Owned Business Assets
– Family-Owned Commercial Fisheries Assets

Foreign Income and Pell Eligibility

What has changed?
Requires foreign income be included in the adjusted gross income (AGI) used to calculate Pell Grant eligibility.

What does this mean?
Beginning with the 2026–27 award year, the One Big Beautiful Bill Act changes how foreign income is treated on the FAFSA, requiring that the foreign earned income exclusion amount be added back to the AGI for the purpose of determining Federal Pell Grant eligibility.

Automatic Calculation
Instead of a manual review by financial aid administrators, the FAFSA system will now automatically add the foreign earned income exclusion amount (reported on the FAFSA) to the AGI.

Student Loan Repayment

Repayment Plans for New Borrowers (after July 1, 2026)

What has changed?
Borrowers who borrow new loans on or after July 1, 2026, will have 2 repayment plan options:
– The Standard Repayment Plan or the Repayment Assistance Plan (RAP).
– If no plan is chosen, borrowers will be placed in the Standard Repayment Plan automatically.

What does this mean?
– All loans must be repaid under the same repayment plan.
– Borrowers with loans borrowed prior to July 1, 2026, who borrow again after that date, will be limited to the new Standard Repayment Plan or RAP.
– Standard Repayment Plans have fixed payments that can span 10-25 years.
– RAP is income-based.

What New Parent Borrowers Need to Know

Repayment Plans for Current Borrowers (prior to July 1, 2026)

What has changed?
– Borrowers who do not take out new loans on or after July 1, 2026, may continue using current repayment plans.
– Students may remain in or switch between existing income-driven plans through July 1, 2028.

What does this mean?
– Borrowers currently enrolled in the Income Contingent Repayment (ICR), Pay As You Earn (PAYE), or Savings on a Valuable Education (SAVE) plan must choose a new repayment plan (either Standard or RAP) by July 1, 2028.
– If no choice is made, borrowers will automatically be placed in RAP.

What Current Parent Borrowers Need to Know

Loan Deferment

What has changed?
– Economic hardships and unemployment deferments will no longer be available.
– Effective July 1, 2027.

What does this mean?
– Borrowers with loans borrowed on or before July 1, 2027, may continue to use these deferment options under the current rules.
– Once those loans are paid off, these deferments will no longer be available.

Definitions

New Borrower

A borrower  who has no outstanding federal student loan balance as of the effective date of the changes under the One Big Beautiful Bill, or who is taking out a federal student loan for the first time on or after that date.

This designation is important because new borrowers may be subject to updated loan limits, eligibility requirements, repayment terms and program availability introduced by the legislation.

Active or Current Borrower

A student is enrolled in program of study at an institution as of June 30, 2026; and a direct loan was made for such program of study prior to July 1, 2026, which has not been paid off.

Aggregate Loan Limit

Refers to the maximum amount a student can borrow in specific, cumulative Subsidized and Unsubsidized Loans for their program.

Lifetime Loan Limit

A capped debt amount a borrower can have of all federal student loan programs combined (undergraduate, graduate, professional).

Legacy Provision

Regarding student loans, the legacy provision acts as a “grandfather clause.” It allows borrowers with existing Federal Direct Loans disbursed before July 1, 2026, to continue borrowing under old rules for up to three (3) years or the difference between the total length of the program the borrower is enrolled in and the period of the program the borrower has already completed.

Professional Student

A student enrolled in a program of study that awards a professional degree upon completion of the program.

Professional Degree

Degree that signifies both completion of the academic requirements for beginning practice in a given profession, and a level of professional skill beyond that normally required for a bachelor’s degree; is generally at the doctoral level, and requires at least two years of post-baccalaureate level coursework; generally requires professional licensure to begin practice; and includes a four-digit program CIP code in the same intermediate group as the following fields:

Law (L.L.B. or J.D.)
Medicine (M.D.)