Starting July 1, 2026, sweeping changes to U.S. federal student aid take effect under the Trump administration’s One Big Beautiful Bill Act (OBBA). These reforms impact Pell Grant eligibility, federal loan limits, and repayment plans for undergraduate, graduate, and professional students. While the maximum Pell Grant award remains $7,395 for the 2026–2027 academic year, eligibility is tightening. Students with significant assets or those receiving non-federal aid that fully covers their cost of attendance are no longer eligible. The Pell Grant now also extends to certain short-term workforce programs.

The Federal Direct Loan Program is eliminating the grad PLUS loan, replacing it with capped unsubsidized Stafford loans: $20,500 annually for graduate students and $50,000 for professional students, with aggregate limits of $100,000 and $200,000 respectively. Parent PLUS loans are now limited to $20,000 per year per dependent student, with a $65,000 aggregate cap. A new lifetime federal loan limit of $257,500 applies across all levels of study.

Two new repayment plans are introduced: the Repayment Assistance Plan (RAP), an income-driven option with a $10 monthly minimum and payments from 1% to 10% of AGI, and the Tiered Standard Repayment Plan, which adjusts fixed payments based on total debt over 10 to 25 years. These changes aim to reduce negative amortization but may affect access for low- and middle-income students pursuing advanced degrees.