Federal Update: Impact of the One Big Beautiful Bill Act on Financial Aid

• The net worth of farms, small businesses with less than 100 employees, and commercial fisheries owned by a family will be exempt from the Student Aid Index (SAI) calculation and should not be included when reporting assets on the 2026-27 FAFSA.

• Foreign earned income will be included in the Adjusted Gross Income (AGI) used to calculate Pell Grant eligibility.
• Students with SAIs greater than twice the maximum Pell Grant amount ($14,790 for the 2026-27 aid year) will be ineligible for a Pell Grant. This does not apply to children of fallen heroes/servicemen who died in the line of duty. 
• Students who receive grants/scholarships from non-federal sources up to the full Cost of Attendance (COA) of their program will not be eligible to receive a Pell Grant.

Undergraduate Students

• Direct Subsidized and Unsubsidized Loan annual and aggregate borrowing limits remain unchanged.
• As of July 1, 2026, the new lifetime borrowing limit on all federal loans received for all levels of study, excluding PLUS loans, is $257,500.
• Beginning with the 2026-27 aid year (summer, fall, and spring terms), students enrolled less than full time (3.5 units/12 credits per semester and 7 units/24 credits per academic year) will have a reduced annual loan limit proportional to their enrollment. Any changes to enrollment may result in a change to a student’s loan eligibility for the term and/or academic year.

Parents of Undergraduate Students

• As of July 1, 2026, the new Parent PLUS Loan annual borrowing limit is $20,000 per year, with an aggregate borrowing limit of $65,000, per dependent student unless a limited exception applies.
• A limited exception allows parent borrowers to continue to borrow Parent PLUS Loans up to the Cost of Attendance, as established by the Office of Financial Aid, minus any other financial aid the student will receive. The new annual and aggregate loan limits do not apply to parent borrowers who qualify for a limited exception.

 The limited exception is for three years or up to the student’s expected time to credential, whichever comes first. To qualify for the limited exception:

• The student must remain continuously enrolled in the same program at the same institution as they were enrolled as of June 30, 2026, AND
• Either the parent or the student must have borrowed a Federal Direct Loan for that same program prior to July 1, 2026.

• The Unsubsidized Loan annual borrowing limit remains unchanged at $20,500.
• As of July 1, 2026, new aggregate and lifetime loan limits apply unless a student qualifies for a limited exception as described below.
  • The new aggregate borrowing limit for graduate students is $100,000, excluding undergraduate borrowing.
  • The new lifetime borrowing limit on all federal loans received for all levels of study, excluding PLUS loans, is $257,500.
• As of July 1, 2026, the Graduate PLUS loan program will be eliminated unless a student qualifies for a limited exception as described below.
• Beginning with the 2026-27 aid year (summer, fall, and spring terms), students enrolled less than full time (9 credits/semester and 18 credits/academic year) will have a reduced annual loan limit proportional to their enrollment. Any changes to enrollment may result in a change to a student’s loan eligibility for the term and/or academic year.

Limited Exception

The OBBBA includes a limited exception that allows graduate student borrowers to continue to borrow Graduate PLUS Loans up to the Cost of Attendance, as established by the Office of Financial Aid, minus any other financial aid the student will receive. The current Unsubsidized Loan annual borrowing limit of $20,500 and the current aggregate federal loan borrowing limit (received for all levels of study) of $138,500 still apply to students who qualify for a limited exception.

The limited exception applies for three years or up to the expected time to credential, whichever comes first. To qualify for the limited exception:

• The student must remain continuously enrolled in the same program at the same institution as they were enrolled as of June 30, 2026, AND
• The student must have borrowed a Federal Direct Loan for that same program prior to July 1, 2026.

Professional Students

At the University of Richmond, students pursuing a J.D. degree are considered professional students for the purposes of federal student loan limits.

• As of July 1, 2026, new annual, aggregate, and lifetime loan limits apply unless a student qualifies for a limited exception as described below.
  • The new Unsubsidized Loan annual borrowing limit is $50,000.
  • The new aggregate borrowing limit for professional students is $200,000, excluding undergraduate borrowing.
  • The new lifetime borrowing limit on all federal loans received for all levels of study, excluding PLUS loans, is $257,500.
• As of July 1, 2026, the Graduate PLUS loan program will be eliminated unless a student qualifies for a limited exception as described below.
• Beginning with the 2026-27 aid year (summer, fall, and spring terms), students enrolled less than full time (9 credit/semester and 18 credits/academic year) will have a reduced annual loan limit proportional to their enrollment. Any changes to enrollment may result in a change to a student’s loan eligibility for the term and/or academic year.

Limited Exception

The OBBBA includes a limited exception that allows professional student borrowers to continue to borrow Graduate PLUS loans up to the Cost of Attendance, as established by the Office of Financial Aid, minus any other financial aid the student will receive. The current Unsubsidized Loan annual borrowing limit of $20,500 and the current aggregate federal loan borrowing limit (received for all levels of study) of $138,500 still apply to students who qualify for a limited exception.

• The limited exception applies for three years or up to the student’s expected time to credential, whichever comes first. To qualify for the limited exception:
  • The student must remain continuously enrolled in the same program at the same institution as they were enrolled as of June 30, 2026, AND
  • The student must have borrowed a Federal Direct Loan for that same program prior to July 1, 2026.

Borrowers currently in federal loan repayment should contact their loan servicer to discuss the impact of these changes on their individual situation.

Undergraduate, Graduate, and Professional Students

• Borrowers with federal loans made on or after July 1, 2026, will have two repayment plan options.
  • Tiered Standard Plan
    • fixed monthly payment
    • repayment term length of 10, 15, 20, or 25 years based on the loan balance
  • Repayment Assistance Plan (RAP)
    • monthly payment based on income
    • loan forgiveness after 30 years of qualifying payments
  • Current borrowers with no new loans made on or after July 1, 2026, may remain on existing repayment plans until July 1, 2028, by when they must transition to the current Income-Based Repayment (IBR), Standard, Graduated, or Extended repayment plans, or the new RAP plan. The current income-driven ICR, PAYE, and SAVE plans will be sunset no later than July 1, 2028.

• All federal loans must be repaid using the same repayment plan. Students with loans borrowed before July 1, 2026, who take out new loans on or after July 1, 2026, will only have the Tiered Standard Plan or the Repayment Assistance Plan as repayment options.

Parents of Undergraduate Students

• Parent PLUS Loans made after July 1, 2026, must be repaid under the new Tiered Standard Plan.
• Current Parent PLUS Loan borrowers with a consolidation loan disbursed before July 1, 2026, and with no new loans after July 1, 2026, maintain eligibility for:
  • Existing fixed payment plans: Standard, Graduated, and Extended
  • Income-Contingent Repayment (ICR)
  • Income-Based Repayment (IBR), if they made one payment under ICR