Breaking Down the Federal Student Aid

Federal Student Aid Changes

Starting Fall 2026 

Changes to federal financial aid eligibility and Direct Loan programs will take effect on July 1, 2026. These updates may impact how your family has been funding college costs.

To help you prepare for the Fall 2026 semester and beyond, the Spelman Financial Aid Office wants to ensure all students and their families are aware of these forthcoming changes.

Undergraduate Student Changes:

• Parent PLUS loan borrowers will be limited to $20,000 a year per student.
• Parent PLUS loan borrowers' lifetime aggregate limit will be $65,000 per student.
• Direct student loan offers will be prorated for students who are enrolled less than full-time.
• Students with an SAI that is equal to or greater than twice the amount of the maximum Pell Grant award will no longer be eligible for the Pell Grant during that academic year.
• Students who receive scholarships or grants that exceed their total cost of attendance (COA) will lose their Pell grant eligibility for that academic year.
• The net worth of certain family farms and small businesses will be excluded from the Student Aid Index (SAI) calculation.
• Foreign income will be included in the adjusted gross income (AGI) when determining Pell grant eligibility.

Graduate/Professional Student Changes:

• The Graduate PLUS loan will no longer be available to new borrowers.
• Direct Unsubsidized borrowing limits remain $20,500 annually with a maximum of $100,000 per non-professional student.
• Direct Unsubsidized borrowing limits will be $50,000 annually with a maximum of $200,000 per professional student.
• Direct student loan offers will be prorated for students who are enrolled less than full-time
• The maximum lifetime aggregate per student borrower will be $257,500.

Legacy Provision: Students who have already received a federal loan before July 1, 2026, may continue to borrow under the old limits for up to three academic years or for the remainder of their program, whichever is shorter. However, if a new borrower takes a loan on or after July 1, 2026, all loans will fall under the new rules.

Loan Repayment Plans:

• New Borrowers: For students taking out their first federal loan on or after July 1, 2026, only two repayment plans will be available: a new Standard Repayment Plan and the new Repayment Assistance Plan (RAP).
• Current Borrowers: Existing income-driven repayment plans like SAVE, PAYE, and ICR will be phased out by July 1, 2028. Borrowers will need to transition to one of the new plans or the amended Income-Based Repayment (IBR) plan.

How to Prepare:

• Review Your Funding Plan: Carefully assess your current and future financial needs for college in light of these new borrowing limits.
• Plan Ahead: If you are a graduate student or a parent who relies on PLUS loans, consider your borrowing strategy for the 2025-2026 academic year.
• Stay Informed: The U.S. Department of Education is expected to release more guidance on the implementation of these changes. We will update this page with new information as it becomes available.