One Big Beautiful Bill Act

Beginning in the 2026-2027 academic year, students will not be able to receive the Pell grant in the following situations:

• Students with foreign income must include it in their Adjusted Gross Income (AGI) for Pell assessment.
• Net worth of family farms, small businesses, and fisheries with fewer than 100 full time employees are excluded from the Student Aid Index (SAI) formula.
• If a student’s (SAI) is at least two times the maximum Pell grant award of $7,395 (which will be $14,790 and above), the student is not eligible for the Pell grant. This does not apply to students who qualify for a Pell grant under the Special Rule (dependent of certain deceased service members and Public Safety Officers).
• To remain eligible for the Pell grant, the amount of scholarships and grants received must be less than the student’s cost of attendance. Students are not eligible for the Pell grant if a student receives scholarships that meet or exceed a student’s full cost of attendance (COA). This includes athletes on a full-ride scholarship.
  • Scenarios:
    • If a student has a cost of attendance of $12,000 and receives $6,000 in Pell grant and $6,000 in an institutional grant, would that violate the provision? Yes, if the sum of Pell and all other non-loan aid (including grants, scholarships, and other grants equals or exceeds the COA, the student does not qualify for the Pell grant.
    • If a student has a cost of attendance of $13,000 and receives $13,000 from an outside scholarship, would that violate the provision? Yes.
    • If a student has a cost of attendance of $13,000 and receives $6,000 in Pell and $6,999 in a scholarship, would that violate the provision? No, because scholarships are lower than the student’s full cost of attendance.

Beginning in the 2026-2027 academic year, there will be changes to the Federal Direct Loans program that will have impact on all student borrowers, mainly graduate and professional students as well as parents of undergraduate dependent students.  If you are planning to borrow federal student loans to assist with paying your education for the 2026-2027 academic year or later, we encourage you to review these updates.

Loan Limits

The bill establishes a total lifetime limit of $257,500 for all combined federal student loans. This cap applies to the total outstanding principal balance of a student’s federal loans, which includes Subsidized, Unsubsidized and Grad PLUS loans. New lifetime loan limit of $257,500 includes student borrowing for undergraduate, graduate and professional study.

Graduate Student Loans

As of July 1, 2026, the bill eliminates Grad PLUS borrowing – which currently allows graduate students to borrow up to the full cost of attendance for their program of study. Grad students who received Grad PLUS funding prior to July 1, 2026, will be grandfathered into the program and can receive funds up to three years in the SAME program in which they began borrowing Grad PLUS loans. If students change their major after July 1, 2026, they will no longer be eligible for a Grad Plus loan.

Borrowing Loan Limits:

Graduate

• Non-professional degrees
• $20,500 annually
• $100,000 aggregate

Graduate professional degrees

• $50,000 annually
• $200,000 aggregate

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. Students may continue to borrow under existing regulations, including Grad PLUS Loans, up to the Cost of Attendance for a maximum of three additional years, provided they meet both of the following conditions:

• The student is enrolled in the same credentialed program during the 2026–27 academic year as they were before July 1, 2026.
• The student obtained a federal student loan (Subsidized, Unsubsidized, or Graduate PLUS) for that specific program prior to July 1, 2026.

If a student changes their major after July 1, 2026, they will no longer be eligible for the Grad Plus loan.

Parent PLUS Loans

As of July 1, 2026, parents will be limited to borrowing up to $20,000 per year per student and $65,000 lifetime per student. These limits apply to all parents of a student, so the maximum amount a student may receive in a year is $20,000, and the lifetime amount is $65,000, regardless of whether one or more parents are borrowing on the student’s behalf. This is a change from the current which allows parents to borrow up to the full cost of attendance per student.

Legacy Provision: Students or parents who have borrowed a Federal Direct loan before July 1, 2026, will be allowed 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.

How does withdrawing from classes affect my enrollment status for federal loan eligibility? 

While there are no changes to the annual amount which students can borrow as undergraduates, eligibility for part-time student loan borrowers will be prorated based on the enrollment status according to the student’s academic level (freshman, sophomore, etc.). An undergraduate student is typically expected to enroll in 12 credit hours or more per semester for a total of 24 credit hours during the fall/spring academic period.  A student enrolled in 12+ credit hours for the fall semester would be eligible for 50 percent of the annual loan limit. To qualify for federal loans, students must still meet the minimum half-time enrollment requirement based on their academic level.

For example, at Rider University, full-time undergraduate enrollment is 12 credits per semester. If a first-time, dependent freshman student takes 12 credits in the fall and 6 in the spring (18 of the standard 24 annual credits), their annual loan eligibility is prorated to 75% of the $5,500 limit, resulting in the new annual limit of $4,125.

Additionally, if a student is initially enrolled at 12 credit hours and withdraws from one 3 credit hour course, their enrollment drops to 9 credit hours and their loan is recalculated.

• Updated calculation: (9+12)/24 = .0875 = 87.5% rounded to 88%
  Subsidized loan: $5,500 X 88% = $4,840
  Unsubsidized loan: $2,000 X 88% = $1,760

Dropping or withdrawing from a course may reduce federal loan eligibility. Students should check with their Financial Aid Counselor before making changes to their course schedule.

How does my summer enrollment affect my loan eligibility?

Since the summer term is not mandatory for most Rider University students, summer credit hours are not included in the denominator of the annual enrollment calculation. The full-time requirement remains at 24 hours.
However, summer credit hours are added to the numerator and can improve enrollment status when determining loan eligibility for the aid year.

For example, an undergraduate dependent senior enrolls in:

• Fall 2026: 6 credit hours
• Spring 2027: 12 credit hours

Calculation:

• (6+12)/24 = .075 = 75%

Annual loan limits based on enrollment:

• Subsidized loan: $5,500 * 75% = $4,125
• Unsubsidized loan: $2,000 * 75% = $1,500

The student then adds 6 credit hours for the Summer 2027.

(6+12+6)/24 = 1 = 100%

The student is now considered full-time and no reduction in annual loan limits is required. 

Will a break in enrollment affect my eligibility under the Legacy Provisions?

Yes. Any break in enrollment or complete withdrawal will result in the loss of eligibility under the Legacy Provisions. Once this occurs, the student will be subject to the new federal loan borrowing rules.

• What Graduate Students Need to Know (updated March 2026) (PDF)
• What Professional Students Need to Know (PDF)
• What New Parent Borrowers Need to Know (PDF)
• What Current Parent Borrowers Need to Know (PDF)
• Federal Student Aid Changes
• Loan Changes: A Brief Overview
• Loan Simulator
• Repayment Plan Options Chart 

What are the new repayment plans beginning on July 1, 2026?

Two new repayment plans will be available for new loans being disbursed as of July 1, 2026:

• New Standard Repayment Plan – Fixed monthly payments over 10,15, 20 or 25 years based on the borrowed loan amount
• Repayment Assistance Plan (RAP) – An income-based plan capping payment at 1% - 10% of your adjusted gross income (AGI) with forgiveness after 30 years. Please note, unlike older repayment plans, you cannot switch back to the standard plan once you have entered RAP.

Can current borrowers choose either of the new repayment plans

• Yes. Current borrowers (with no new loans after July 1, 2026) can temporarily remain on older income-driven repayment plans, such as IBR, PAYE or SAVE; however, they must transition to a new repayment plan by July 1, 2028. If they do not select a plan by that date, their servicer will automatically move into RAP.

What repayment plans are available for consolidation loans made after July 1, 2026?

• Consolidation loans are only eligible for the Repayment Assistance Plan (RAP) or standard repayment plans.

What loan repayment plans are available for consolidation loans currently in an income-driven repayment plan (IDR)?

• Borrowers currently in an IDR plan have until July 1, 2028, to select a standard repayment plan, income-based repayment plan (or the Repayment Assistance Plan (RAP).

Are new Parent Plus loans issued as of July 1, 2026, eligible for RAP?

• No, all new Parent PLUS loans must be repaid under the standard repayment plan and are NOT eligible for RAP.

What happens if a borrower selects RAP but has loans that are not eligible for this option, such as Parent Plus loans?

• The borrower must repay the ineligible loans separately under the standard repayment plan.

If a borrower took out a Parent Plus loan before July 1, 2026, and then borrowed after July 1, 2026, what are the repayment options?

• All loans must be repaid under the same repayment plan, and for Parent Plus loan borrowers, the only eligible plan is the standard repayment plan.

Are there changes to deferment options?

• Yes. Economic Hardship and Unemployment deferments will be eliminated for loans first disbursed as of July 1, 2027. However, there is still an option for forbearance for up to nine months in any two-year period.

No. If you are currently receiving aid or are in repayment, your grants and loans remain under their present terms for now. Most changes – including new loan limits and repayment options will apply starting in the 2026-2027 academic year.

 

OB3 requires annual loan amounts to be prorated in direct proportion to your enrollment status.  Therefore, if you are not enrolled in a full-time status, your loan amounts will be adjusted based upon the number of credit hours enrolled per semester.  You must still be enrolled in at least half-time status to receive loans. This has not changed.
 

Every student, athlete or not, who receives a full-ride scholarship that meets or exceeds their Cost of Attendance will not receive Pell Grants for the terms they receive the scholarship.
 

Grad PLUS loans are being phased out under OB3.  New graduate and professional students will no longer be eligible to borrow Grad PLUS beginning July 1, 2026.  If you are already borrowing Direct Loans prior to July 1, 2026, you can still borrow a Grad PLUS if you remain enrolled in your current program of study for up to three consecutive academic years.

• Scholarships for Graduate Students
• Assistantships
• Alternative or Private Educational Lenders
• Monthly Payment Plan
• External Scholarships