Federal Student Aid Changes beginning 2026 - 2027

In July 2025, President Trump signed into law House of Representatives 1 (H.R.1), commonly referred to as One Big Beautiful Bill Act (OB3). The legislation introduces changes to federal student aid programs that may impact how students and families finance their education.

We understand these changes may bring uncertainty and raise new questions about your financial plans to fund your education. Whether you are new to OC or continuing your education here, our Financial Aid team is here to help you navigate what’s ahead. We are closely monitoring federal updates and are committed to providing clear guidance.  

So, what is changing under OB3?

Here are some highlights of the upcoming changes to federal student aid:

Federal Pell Grant

  • Students whose Student Aid Index (SAI) exceeds twice the maximum Pell Grant award are not eligible for a Pell Grant. For example, a student with an SAI of over $14,790 is ineligible for federal Pell Grant funds, as their SAI is twice the maximum Pell Grant amount of $7,395.
  • Students receiving scholarships that meet or exceed their full cost of attendance will not be eligible for Pell Grant.

Federal Direct Student Loans

  • Students enrolled less than full time (12 credits), will have their federal Direct subsidized and unsubsidized loans prorated based on annual credit hours.
  • Lifetime borrowing limit of $257,500 on all federal student loans.  

Federal Parent PLUS Loans

  • New federal Parent PLUS loan borrowing limits of $20,000 per year per dependent student and a $65,000 aggregate limit per dependent student.

Student Loan Repayment

  • New student loan repayment plans include a tiered Standard Repayment Plan and a new income driven Repayment Assistance Plan.
  • Existing income contingent repayment plans will sunset in 2028.

What should you do?

The Financial Aid team will continue to closely monitor federal updates and are committed to providing clear guidance. 

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