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One Big Beautiful Bill Act

CHANGES FOR BEARKATS

Federal aid rules are changing under the One Big Beautiful Bill Act (OBBBA). Many of these updates will take effect on July 1, 2026 for the 2026 - 2027 academic year.

The U.S. Department of Education has not yet released full guidance, and SHSU will update this information as new details emerge.

For additional information, visit studentaid.gov.

Updates

This information is what we know as of April 2026 and is continually updated.

FAFSA & PELL CHANGES

Pell Grant updates

Pell Grants & Full Scholarships

  • Students whose Cost of Attendance (COA) is fully covered by non-federal aid will no longer be eligible for Pell.
  • Example: A Pell-eligible student with a scholarship covering the full Cost of Attendance will no longer receive both the scholarship and the Pell Grant.

Pell grants & High Student Aid index (SAI)

  • Students with an SAI greater than twice the maximum Pell Grant amount will be ineligible for any Pell Grant.
  • Example: If the max Pell Grant is $7,395, students with an SAI over $14,790 will not qualify.

 

FAFSA Changes effective july 1st, 2026 

General Updates

  • Family farms and family-owned small businesses will no longer be counted as assets.
    • Family Farm – Farms on which the family resides
    • Small Business – 100 or fewer full-time (or full-time equivalent) employees
  • Family-owned commercial fisheries are now also exempt from asset reporting.

Foreign Income Reporting

  • Foreign income must now be included in the Adjusted Gross Income (AGI) for Pell Grant eligibility

UNDERGRADUATE DIRECT LOANS

Current Limits (before July 1st, 2026)

  • Annual and aggregate limits are based on dependency status
    • Dependent students
      • Freshman: $5,500
      • Sophomore: $6,500
      • Junior/Senior: $7,500
    • Independent students
      • Freshman: $9,500
      • Sophomore: $10,500
      • Junior/Senior: $12,500
  • Maximum Lifetime Borrow Amount:
    • Dependent: $31,000 total
    • Independent: $57,500 total

 

Changes Effective July 1st, 2026

  • Loans must be reduced when students are not enrolled full-time. The reduction is based on their enrollment status.
  • Undergraduate Annual Limits: Unchanged
  • Undergraduate Aggregate Limit: Unchanged
  • Total Aggregate Limit: $257,500 across all federal loan programs (undergraduate and graduate)

PARENT PLUS DIRECT LOANS

Current Limits (before July 1st, 2026)

  • Annual Limit: Determined by the formula of  “Cost of Attendance – Other Aid (i.e. grants, scholarships, other loans)”
  • Aggregate Limit: No limit
  • Eligibility is based on student enrollment and a minimal credit check of the parent applicant

Changes Effective July 1st, 2026

  • Annual Limit: $20,000 per student (combined from all parents)
  • Aggregate Limit: $65,000 per student
  • Legacy Provision: Students with any existing Direct Loan may continue borrowing for up to 3 years or for the remainder of their expected time to complete the program, within the published length of time to do so, whichever is less.
  • New Borrowers: Must seek alternative funding if limits are exceeded

Graduate/Professional direct loans

Current Limits (before July 1st, 2026)

  • Annual Limit: $20,500
  • Aggregate Limit: $138,500 (includes undergraduate borrowing)

 

Changes Effective July 1st, 2026

  • Graduate Students:
    • Loans must be prorated based on enrollment status
    • Annual limit remains $20,500
    • Aggregate limit = $100,000 (excludes undergrad borrowing)
  • Professional Students:
    • Loans must be prorated based on enrollment status
    • Annual limit = $50,000
    • Aggregate limit = $200,000 (combined graduate and professional direct loans)
  • Total Aggregate Limit: $257,500 across all federal loan programs (undergraduate and graduate)

Graduate PLUS LOANS

Current Limits (before July 1st, 2026)

  • Annual Limit: Determined by the formula of  “Cost of Attendance – Other Aid (i.e. grants, scholarships, other loans)”
  • Aggregate Limit: No limit
  • Eligibility is based on student enrollment and a minimal credit check of the applicant

 

Changes Effective July 1st, 2026

Graduate PLUS loans are eliminated for new borrowers.
  • Legacy Provision: Students with an existing Grad Plus Loan may continue borrowing for up to 3 years or for the remainder of their expected time to complete the program, within the published length of time to do so, whichever is less.
Prior eligibility requirements will apply to legacy borrowers.

federal loan repayment changes

Current Repayment Plans (before July 1st, 2026)

  • Fixed-Term Plans:
    • Standard Repayment
    • Graduated Repayment
    • Extended Repayment
    • Income Sensitive Repayment
  • Income-Driven Plans (IDR):
    • Income-Based Repayment (IBR)
    • Pay As You Earn (PAYE)
    • Saving on a Valuable Education (SAVE)
    • Income-Contingent Repayment (ICR)

 

Changes Effective July 1st, 2026

First Loan Borrowed on or after July 1st, 2026

 

New Standard Repayment Plan:

  • Four Fixed-Terms:
    • 10 years: balances <$25,000
    • 15 years: balances between $25,000–$49,999
    • 20 years: balances between $50,000–$99,999
    • 25 years: balances $100,000+

New Income-Based Repayment Assistance Plan (RAP):
  • Monthly payment: 1%–10% of Adjusted Gross Income (AGI)
  • $10 minimum payment
  • $50 deduction per dependent
  • 30-year repayment term; forgiveness after 30 years
  • No negative amortization (balances won't grow when payments don't cover interest)
  • Payments count toward PSLF
 

 

RAP INCOME GRID
Borrowers' AGI Monthly Payment
Less than $10,000 $10/month
$10,000 - $19,999 1% of monthly AGI
$20,000 - $29,999 2% of monthly AGI
$30,000 - $39,999 3% of monthly AGI
$40,000 - $49,999 4% of monthly AGI
$50,000 - $59,999 5% of monthly AGI
$60,000 - $69,999 6% of monthly AGI
$70,000 - $79,999 7% of monthly AGI
$80,000 - $89,999 8% of monthly AGI
$90,000 - $99,999 9% of monthly AGI
$100,000+ 10% of monthly AGI
 

Current Borrowers

  • IBR borrowers may remain in their plan
  • All other non-Parent PLUS IDR borrowers must choose a new plan by July 1, 2028 or be moved to RAP
  • Parent PLUS loan borrowers will be moved to the new Standard Plan after July 1st, 2028 unless they consolidate and enroll in an IDR before July 1, 2026.

loan proration 

How less than full-time enrollment may affect your loans

Beginning July 1, 2026, federal student loans will be prorated based on the number of credit hours you enroll in.

  • If you enroll in fewer than the full-time minimum, your loans may be reduced.

  • Full-time minimums are:

    • 9 credit hours for graduate and professional programs

    • 12 credit hours for undergraduate programs