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One Big Beautiful Bill Act and Financial Aid Impacts
Legislation recently enacted by Congress, referred to as the One Big Beautiful Bill Act (OBBBA), will implement substantial modifications to federal financial aid, effective the 2026–2027 academic year, starting July 1, 2026. The OBBBA introduces various changes that will impact all categories of students, including prospective, undergraduate, and graduate individuals.
The modifications include limitations and requirements related to federal loans, revised repayment options for both existing and forthcoming borrowers, and adjustments to Pell Grant eligibility criteria. We recognize that these changes may raise questions and concerns, as well as influence personal financial decisions.
The Office of Financial Aid is diligently monitoring guidance from the U.S. Department of Education and will disseminate more detailed information as it becomes available. We are committed to providing support to students and families throughout this transition and remain at your service to assist you.
Starting in the 2026–27 academic year, students will no longer be eligible for a Pell Grant if their Student Aid Index (SAI) is greater than twice the maximum Pell award for that year. An applicant with an SAI equal to or greater than $14,790 for the award year are ineligible for a Pell Grant.
Note: 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).
Pell award amounts will continue to vary based on income and family size, but there is now a firm cutoff tied to the annual Pell maximum.
Students receiving scholarships that cover the full cost of attendance(COA). Students who receive grants or scholarships from non-federal sources covering their entire COA are ineligible to receive a Pell Grant, even if otherwise eligible for the program.
Congress enacted legislation known as the One Big Beautiful Bill which will bring some important changes to the Federal Direct Loan program starting with the 2026–2027 academic year, effective July 1, 2026. These changes will impact all student borrowers, mainly affect graduate and professional students, as well as parents of undergraduate dependent students. If you are planning to use federal loans to help pay for your education in the 2026–2027 year or later, we encourage you and your family to take a close look at these updates.
Eligibility for part-time students will be prorated based on enrollment status according to the student's academic level. An undergraduate student is considered full-time when enrolled in 12 or more credits, while a graduate student is considered full-time when enrolled in 9 or more credits. To qualify for federal loans, students must still meet the minimum half-time enrollment requirement based on their academic level.
Undergraduate Less than Full-time Enrollment
An undergraduate student is typically expected to take 12 or more credits a semester for a total of 24 or more credits during the fall/spring academic year. A student enrolled in 12+ credits during the fall semester would be eligible for 50 percent of the annual loan limit. A student who enrolls in six credits for the fall semester (6/24) would be eligible for 25 percent of the annual loan limit for the semester.
| Undergraduate Enrollment | Percent of the annual loan limit |
| 12+ | 50.00% |
| 11 | 45.83% |
| 10 | 41.67% |
| 9 | 37.50% |
| 8 | 33.33% |
| 7 | 29.17% |
| 6 | 25.00% |
| 5-1 | 0% |
Graduate Less than Full-time Enrollment
A graduate student is typically expected to take nine credits a semester for a total of 18 credits during the fall/spring academic year. A student enrolled in nine credits during the fall semester would be eligible for 50 percent (9/18) of the annual loan limit for the fall. A student who enrolls in six credits for the fall semester (6/18) would be eligible for 33.3 percent of the annual loan limit for the semester.
| Graduate Enrollment | Percent of the annual loan limit |
| 9+ | 50.00% |
| 8 | 44.44% |
| 7 | 38.89% |
| 6 | 33.33% |
| 5 | 27.78% |
| 4-1 | 0% |
The legislation establishes a total lifetime limit of $257,500 for all combined federal student loans. This cap applies to the total outstanding principal balance of your federal loans, which includes Subsidized, Unsubsidized, and Grad PLUS loans. Please note that this aggregate limit does not include Parent PLUS loans. New lifetime loan limit $257,500 includes student borrowing for undergraduate, graduate, and professional study.
Effective July 1, 2026, new regulations will be put in place concerning federal loan eligibility for graduate and professional students. The most significant changes will affect the Graduate PLUS Loan program and introduce new lending limits for Direct Unsubsidized Loans. Please review the table below for key updates on the new federal regulations affecting Unsubsidized and Graduate PLUS loan borrowers.
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Graduate Federal Loan Eligibility |
|
|
Graduate PLUS Loan Eliminated |
Graduate PLUS loans will be eliminated effective July 1, 2026; beginning on that date, Graduate PLUS loans will not be available for new federal student loan borrowers. |
|
Aggregate Loan Limit |
Graduate students who borrow Federal Direct Loans will have a new aggregate loan limit of $100,000. Professional students who borrow Federal Direct Loans will have a new aggregate loan limit of $200,000.* see chart below for annual and aggregate limits. |
|
Legacy Provision |
Students who have borrowed a Federal Direct Loan before July 1, 2026, will benefit from a legacy provision that allows them to borrow based on previous loan limits for up to three academic years, or until the end of their academic program, whichever comes first. To qualify, students must remain enrolled in the same program of study at the same institution. |
Parents of Dependent Undergraduate Students
Effective July 1, 2026, new regulations will be implemented regarding borrowing federal Parent PLUS loans. Please review the table below for key updates on these new federal regulations for Parent PLUS loan borrowers.
|
Parent PLUS Loan Key Updates |
|
|
Annual Loan Limit |
Parents of a dependent undergraduate student who borrows a Parent PLUS loan have a new annual loan limit of $20,000 per child |
|
Aggregate Loan Limit |
Parents of a dependent undergraduate student who borrows a Parent PLUS loan have a new aggregate loan limit of $65,000 |
|
Legacy Provision |
Students or parents who have borrowed a Federal Direct loan before July 1, 2026 will have a legacy provision, that allows them to borrow based on previous loan limits, for up to three academic years or the end of the dependent student's academic program, whichever comes first. To qualify students must remain enrolled in the same program of study at the same institution. |
New Income-Based Plan: The Repayment Assistance Plan (RAP)
- RAP monthly payments are calculated based on Adjusted Gross Income (AGI).
- $10 minimum monthly payment is required, and a borrower's RAP monthly payment is based on their AGI and number of dependents.
- Income and dependents are calculated separately for married borrowers who filed taxes separately from their spouses.
- Borrowers who don't have an AGI or whose AGI doesn't reasonably reflect the borrower's current income are required to provide the Department of Education (ED) with documentation to calculate their monthly payments.
Repayment Options
New loans disbursed after July 1, 2026
Students who have borrowed loans before July 1, 2026, and will borrow a new loan after July 1, 2026
Borrowers with no new loans made on or after July 1, 2026
The bill eliminates current income-driven repayment plans (IBR, PAYE, SAVE) and replaces them with a new Repayment Assistance Program (RAP).
The bill limits the student to the new RAP or the standard plans for the new loan.
Continue to be eligible to enroll in the current Standard, current Income Based (IBR), Graduated, and Extended repayment plans, and could also opt in to the new RAP. Current borrowers enrolled in ICR, PAYE, or SAVE plans must transition to a new repayment plan by July 1, 2028. If no selection is made by that date, they will be moved into RAP.
| Repayment Options | ||
| New loans disbursed after July 1, 2026 | Students who have borrowed loans before July 1, 2026, and will borrow a new loan after July 1, 2026 | Borrowers with no new loans made on or after July 1, 2026 |
| The bill eliminates current income-driven repayment plans (IBR, PAYE, SAVE) and replaces them with a new Repayment Assistance Program (RAP). | The bill limits the student to the new RAP or the standard plans for the new loan. | Continue to be eligible to enroll in the current Standard, current Income Based (IBR), Graduated, and Extended repayment plans, and could also opt in to the new RAP. Current borrowers enrolled in ICR, PAYE, or SAVE plans must transition to a new repayment plan by July 1, 2028. If no selection is made by that date, they will be moved into RAP. |
Contact Information
Office of Financial Aid
Tyler Hall, Suite 206
1700 E. Cold Spring Lane
Baltimore, Maryland 21251
P: 443-885-3170
F: 443-885-8272
E: finaid@morgan.edu
School Code FAFSA: 002083
ScholarshipUniverse is here to help you fund your education!
Contact Information
Office of Financial Aid
Tyler Hall, Suite 206
1700 E. Cold Spring Lane
Baltimore, Maryland 21251
P: 443-885-3170
F: 443-885-8272
E: finaid@morgan.edu
School Code FAFSA: 002083
ScholarshipUniverse is here to help you fund your education!