Federal Aid Changes
Federal Financial Aid Changes for 2026
What Students Should Know About the One Big Beautiful Bill Act (OBBBA)
Recent federal legislation known as the One Big Beautiful Bill Act (OBBBA) includes several updates to federal student aid programs. Some of these changes will take effect beginning July 1, 2026, and may impact how students borrow federal loans or qualify for certain types of aid.
If you’re researching 2026 FAFSA changes, new federal student loan limits, or Pell Grant eligibility updates, this page explains the key information you need to know.
At the University of Holy Cross, our goal is to help students and families understand these updates and continue to find affordable ways to pay for college.
Most importantly: federal financial aid is not going away. Students will still have access to grants, loans, scholarships, and other financial support.
Key Federal Student Aid Changes (Beginning July 1, 2026)
Graduate PLUS Loan Changes
- The Grad PLUS Loan program will be discontinued for new borrowers starting July 1, 2026.
- Graduate students will still be able to borrow Direct Unsubsidized Loans with updated borrowing limits.
Parent PLUS Loan Changes
Parent PLUS Loans will still be available to help families pay for undergraduate education, but new limits will apply:
- $20,000 per year per student
- $65,000 lifetime borrowing limit per student
Federal Student Loan Lifetime Limit
The new legislation establishes a lifetime federal borrowing limit of $257,500 across most federal student loan programs.
These changes apply primarily to new loans borrowed after July 1, 2026.
The 2026–2027 FAFSA will include updated rules affecting Pell Grant eligibility.
Key updates include:
- Students with a Student Aid Index (SAI) greater than twice the maximum Pell Grant amount may no longer qualify for a Pell Grant.
- Students whose total financial aid already covers the full cost of attendance may not be eligible for a Pell Grant.
These updates may affect some students' federal financial aid eligibility, depending on their FAFSA results.
Beginning with the 2026–2027 FAFSA, some financial information used to determine aid eligibility will change.
Updates include:
- Additional types of income may be considered when calculating federal aid eligibility
- Foreign income may be included in certain cases when determining Pell Grant eligibility
- Asset exemptions for family farms and small businesses will be reinstated
These FAFSA changes are intended to improve how federal aid eligibility is calculated for families.
How the University of Holy Cross Helps Keep College Affordable
Even with these federal policy changes, there are many ways students can afford college.
At the University of Holy Cross, students may qualify for:
- Federal grants, including the Pell Grant
- Federal student loans
- Institutional scholarships
- State financial aid programs
- Private scholarships and grants
Our financial aid counselors work closely with students and families to help them maximize available financial aid and scholarship opportunities.
What Students Should Do Next
If you are planning for college and are concerned about federal financial aid changes in 2026, here are a few important steps:
✔ Complete the FAFSA every year
✔ Apply for scholarships early
✔ Review your Student Aid Index (SAI) once your FAFSA is processed
✔ Contact a financial aid counselor if you have questions about your eligibility
Frequently Asked Questions (FAQ)
Yes. Federal financial aid programs such as Pell Grants and federal student loans will still be available. The law changes how some programs operate, but aid is not being eliminated.
Most changes from the One Big Beautiful Bill Act will take effect July 1, 2026, beginning with the 2026–2027 academic year.
Yes. The 2026 FAFSA will include updates to how some financial information is calculated when determining federal financial aid eligibility, including Pell Grant eligibility.
Absolutely. Completing the Free Application for Federal Student Aid (FAFSA) is the best way to determine what federal, state, and institutional aid you may qualify for.
We're Here to Help
Financial aid policies can be complex, but you don’t have to navigate them alone. The University of Holy Cross Office of Financial Aid is here to help you understand your options and build a plan to pay for college.
Contact Financial Aid