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2026-27 Changes to Federal Financial Aid

1. New repayment plan options begin July 2026
Your current aid may not change, but new Federal Financial Aid will be affected by the following changes:

Pell Grant Changes
In the 2026–27 aid year:

  • Students whose Student Aid Index (SAI) exceed twice the maximum Pell Grant award may no longer qualify for a Pell Grant. This means anyone with an SAI of 14791 or higher will no longer be eligible for a Pell Grant.
  • Students whose grants and scholarships from non-federal sources fully cover their cost of attendance may not be eligible for a Pell Grant.
  • Foreign income will be included in Pell eligibility calculations.

Federal Loan Changes
Beginning July 1, 2026:

  • Federal borrowing limits listed on a student’s offer letter are assuming the student is a full time (12 credit hours or more each term). If the student enrolls for less than full time (< 12 credits), the loan amount disbursed will be prorated based on the students’ enrolled credits and must be reduced if the student drops or withdraws from any courses in the term.
  • Parent PLUS Loans will be capped at $20,000 per year per student, with a lifetime limit of $65,000 per student.

2. Current income-driven repayment plans are being phased out
Currently, federal student loans are eligible for various income driven repayment plans, including PAYE, Income-Contingent Repayment, and Income-Based Repayment. For loans disbursed after July 1, 2026, however, the new RAP option will be the only income-driven repayment plan. If you’re on PAYE, ICR, or the now-defunct SAVE plan: You’ll need to switch to IBR or RAP by July 1, 2028. If you don’t switch, your loan servicer will auto-enroll you in one of those plans.

Parent borrowers
Parent PLUS loans are only eligible for income-driven repayment plans if they are first consolidated into a Direct Consolidation Loan. After consolidation, the only income-driven repayment plan available for Parent PLUS loans is the Income-Contingent Repayment (ICR) Plan. Parent PLUS loans cannot be repaid under the new SAVE Plan or other income-driven repayment plans.

3. The SAVE plan will no longer enroll new borrowers
Department of Education will no longer enroll new borrowers in SAVE and will begin transitioning SAVE borrowers into alternative plans. If your loans have been on pause due to the SAVE plan litigation, it’s time to explore your other repayment options. The Federal Student Aid Loan Simulator tool can help you compare costs on alternative plans. Look for updates after July 1, 2026.

4. Part-time enrollment will cause Subsidized AND Unsubsidized Loan awards to be prorated.

5. Prepare for the upcoming student loan changes

  • File the FAFSA as early as possible.
  • Meet with a financial aid counselor if you expect to rely on Pell Grants or federal loans after July 1, 2026.
  • Review your financial aid offers carefully.
  • Review your current repayment plan, if you have one. Compare future repayment options and be proactive, otherwise the choice may be made for you.
  • Note key deadlines that may impact your loan.
  • Plan for potential tighter borrowing limits.
  • Assess your strategy as a parent borrower.
  • Consider tax implications of loan discharge.
  • Provide up-to-date contact information to receive important communications about transitioning plans and deadlines.
  • Watch for updates from our Financial Aid Office as federal guidance is released.

Federal Student Loan Types

Changes to Federal Financial Aid from the One Big Beautiful Bill Act