Federal Student Aid FAQs

Federal Student Aid Change

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Federal Student Aid FAQs: New Limits and Eligibility

(Effective July 2026)

Overview

The Spelman Financial Aid Office has compiled the following Frequently Asked Questions (FAQs) to help students and their families understand the federal student aid changes taking effect for the Fall 2026 semester and beyond.
U.S. Capitol Building

One Big Beautiful Bill Act: 2026-27 Changes to Federal Financial Aid

This information reflects the most current guidance available and is subject to change. Spelman’s Financial Aid Office will continue to make updates regarding the scope and effect of these changes as we receive additional guidance. Please contact our office with any questions regarding your financial aid.

The One Big Beautiful Bill Act passed on July 4, 2025 brings many changes to federal student aid programs. Most of these changes are effective starting July 1, 2026, and will affect students for the 2026-27 school year. The Department of Education may also make further adjustments prior to July 1, 2026.

 

Federal Pell Program

The One Big Beautiful Bill allocated $10 billion in funding to address the upcoming Pell shortfall and fund the program for two years. However, there were significant changes to Pell eligibility.

 
Pell Grant Eligibility Changes

The following Pell changes take effect beginning July 1, 2026:

  • Students meeting or exceeding their full Cost of Attendance with scholarships/waivers type aid will not be eligible for any amount of Pell Grant.

  • Students whose Student Aid Index (SAI) is at least two times the current Pell Grant maximum of $7,395 will not be eligible for the Pell Grant. Example: For 2025-26, that would equal an SAI of $14,790.

Contact Info

Financial Aid

350 Spelman Lane, S.W., Atlanta, GA. 30314
Packard Hall, 1st floor

404-270-5222
financialaid@spelman.edu

Mon. - Fri. | 9 a.m. - 5 p.m.

Federal Student Loan Programs

Legacy Provision

You may borrow under current loan limits if you have had a federal student loan disburse before July 1, 2026, while enrolled in a qualified program of study. This legacy provision lasts for three years or until you complete your qualified program of study, whichever comes sooner.

Legacy provisions exist for many of these loan changes. However, transferring schools, switching majors, or other academic changes may affect your ability to be included in these legacy limits. Please reach out to our office to discuss the implications of any adjustments to your academic status.

Am I a new or active borrower?

  • New borrower (no legacy): A student with no loans taken out prior to July 1, 2026, or all loans taken out during that time have been paid in full.

  • Active borrower (under legacy): A student is enrolled in a program of study at an institution as of June 30, 2026; and a direct loan was made for such program of study prior to July 1, 2026, which has not been paid off.


Loan Proration

Beginning July 1, 2026, loan limits will be prorated depending on enrollment level, similar to grant funding. This means borrowers enrolled less than full time will only be able to borrow loan amounts in direct proportion to their credit load, with a minimum half-time enrollment requirement.

We expect to receive further information from the Department of Education regarding exact proration amounts.

New Loan Limits

Parent PLUS:

Beginning July 1, 2026, Parent PLUS loans will be capped at $20,000 per academic year with a $65,000 aggregate limit. Previously, Parent PLUS Loans had no cap and could be taken out for whatever amount was needed to get the student up to full Cost of Attendance.

  • These limits are per dependent student, meaning parents with multiple dependent students can take out these limits in total for each student.

  • The number of parent borrowers does not change the limits, as they are tied to the student. If a student has two parents who wish to borrow on their behalf, no more than $20,000 per academic year and $65,000 maximum total may be taken out.

Legacy Provision

If a student has received a Parent PLUS Loan disbursement before July 1, 2026 while enrolled in a qualifying program, the parent borrower may continue borrowing Parent PLUS Loans under previous loan limits for three academic years or until the student completes their program, whichever is sooner.

2026-27 Student Loan Borrowing Limit

Academic Level Dependent Student Independent Student Subsidized Amount
First Year Undergraduate $5,500 $9,500 $3,500
Second Year Undergraduate $6,500 $10,500 $4,500
Third Year Undergraduate (and beyond) $7,500 $12,500 $5,500
Lifetime Limit $31,000 $57,500
Parent Plus Loans
Per Year Aggregate Per Child
$20,000 $65,000
Graduate Students
School Per Year Aggregate
Graduate $20,500 $100,000
Professional $50,000 $200,000
Students with existing federal loans disbursed before July1, 2026, are grandfathered under previous loan limits. This provision expire July 1, 2030.

 

Effective July 1, 2026, the One Big Beautiful Bill enacts a $257,500 lifetime borrowing limit on all federal student loans, total. This does not include Parent PLUS loans, which are borrowed by parents on their student’s behalf.

Elimination of Graduate PLUS Loans

Effective July 1, 2026, the Graduate PLUS Loan Program has been discontinued entirely for all new borrowers. Graduate PLUS Loans currently allow graduate students to borrow up to the Cost of Attendance for their program.

These changes apply to federal student loans only. They do not impact private education loans.

Federal Student Loan Repayment Option terms are changing. For questions regarding your loan repayment, please contact your loan servicer directly. You may look up your loan servicer on Studentaid.gov.

General Information

When do these federal financial aid changes take effect?

Changes to federal financial aid eligibility and Direct Loan programs will take effect on July 1, 2026.

Where can I find updated information on the implementation of these changes?

The U.S. Department of Education is expected to release more guidance on the implementation of these changes. The Spelman Financial Aid Office will update its page with the latest information as it becomes available.

Undergraduate Student and Parent PLUS Loan Changes

What are the new limits for Parent PLUS loan borrowers?

Parent PLUS loan borrowers will be subject to new limits:

  • An annual limit of $20,000 per student.
  • A lifetime aggregate (or total) limit of $65,000 per student.
How will the Student Aid Index (SAI) calculation change?
  • The net worth of certain family farms and small businesses will be excluded from the Student Aid Index (SAI) calculation.
  • 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.
What are the new rules for Pell Grant eligibility?

Several changes will affect Pell Grant eligibility:

  • Students with an SAI that is equal to or greater than twice 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.
  • Foreign income will now be included in the adjusted gross income (AGI) when determining Pell Grant eligibility.
How will my enrollment status affect my Direct student loan offer?

Direct student loan disbursements will be prorated for students who are enrolled less than full-time.

Graduate/Professional Student Loan Changes

Will the Graduate PLUS loan still be available?

The Graduate PLUS loan will no longer be available to new borrowers. However, graduate borrowers remain eligible for the Federal Direct Unsubsidized Loan.

What is the difference between a Professional and Non-Professional student for loan limit purposes?

The federal government distinguishes between two types of graduate students for the purpose of Direct Unsubsidized Loan limits:

  • Professional Student: A student enrolled in a graduate-level program that leads to a professional degree required to practice in a specific, often licensed, field (e.g., Law (J.D.), Medicine (M.D.), Dentistry (D.D.S.), Pharmacy (Pharm.D.)). These students are subject to higher borrowing limits.
  • Non-Professional Student (or Graduate Student): A student enrolled in a standard graduate-level program that awards a Master's (e.g., M.A., M.B.A., M.S.) or a traditional Doctoral degree (e.g., Ph.D.). These students are subject to lower borrowing limits.
What are the new Direct Unsubsidized borrowing limits for graduate and professional students?

The limits vary based on the program:

  • Non-professional students: Borrowing limits remain $20,500 annually, with a maximum of $100,000.
  • Professional students: Borrowing limits will be $50,000 annually, with a maximum of $200,000.
  • Aggregate Limits: The aggregate limit is capped at $100,000 for graduate students and $200,000 for professional students and does not include amounts borrowed as an undergraduate.
  • Lifetime Limit: Borrowers who are both graduate and professional students at some point in their educational careers may only borrow up to $200,000 in total for graduate and professional school.
  • Legacy Provision: If a borrower has a Federal Direct Loan made before July 1, 2026, while enrolled in a credentialed program, the borrower can continue to borrow under current loan limits for three (3) academic years or the remainder of their expected time to credential, whichever is less. However, if you are a current borrower and plan to enroll into a new credential program (graduate or professional) after July 1, 2026, you are subject to the new borrowing limits for graduate and professional students.
How will less than full-time enrollment affect a graduate student's Direct loan offer?

Direct student loan offers will be prorated for graduate/professional students who are enrolled less than full-time.

Legacy Provision and Repayment Plans

I already have a federal loan. Will the new limits apply to me?

Students who received a federal loan before July 1, 2026, may be covered by a Legacy Provision. These students can 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.

What repayment plans will be available to new borrowers starting July 1, 2026?

Students taking out their first federal loan on or after July 1, 2026, will only have two repayment plans available: the new Standard Repayment Plan and the new Repayment Assistance Plan (RAP).

What happens to current borrowers who are on existing income-driven repayment plans (SAVE, PAYE, ICR)?

Existing income-driven repayment plans like SAVE, PAYE, and ICR will be phased out by July 1, 2028. Current borrowers will need to transition to one of the new plans or the amended Income-Based Repayment (IBR) plan.

How to Prepare

How should my family and I prepare for these changes?

Spelman’s Financial Aid Office advises students and families to take the following steps:

  • Review Your Funding Plan: Carefully assess your current and future financial needs for college in light of the new borrowing limits.
  • Plan Ahead: If you are planning to attend graduate school or are a parent who relies on PLUS loans, consider your borrowing strategy for the 2026-2027 academic year.
  • Stay Informed: Monitor updates from the U.S. Department of Education and the Financial Aid Office as new guidance is released.

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