Federal Aid Updates
One Big Beautiful Bill Act (OBBB)
What Students Need to Know
The One Big Beautiful Bill Act (OBBB) introduces significant changes to federal student loans and grants starting July 1, 2026. Please see the information below for changes to federal aid.
PELL Grant Updates
- Students with the full Cost of Attendance covered by other non-federal aid will no longer be eligible for the Pell Grant, regardless of whether they would have been eligible.
- This may impact students with full-ride scholarships and student-athletes on scholarships.
- Students with a Student Aid Index (SAI) equal to or greater than twice the maximum Pell Grant award will not be eligible for Pell.
- An SAI of $14,790 or higher will no longer be eligible for a Pell Grant.
Graduate PLUS Loan Program
- This will be eliminated for new borrowers after July 1, 2026.
- Current borrowers who have already begun pulling Grad PLUS loans before July 1, 2026, can continue to borrow for up to three (3) years or until graduation (whichever comes first).
New Loan Limits
Graduate Students:
- Annual limit will continue to be $20,500 (Federal Direct Unsubsidized Loan)
- Lifetime limit changes to $100,000 (does not include undergraduate debt)
Parent PLUS Loans:
- The annual limit will now be $20,000 per dependent student
- Lifetime Aggregate limit is now $65,000 per dependent student
- If the parent has already used the PLUS loan for their current dependent student, they can continue to borrow under the current loan limits for 3 years or until the dependent student graduates (whichever comes first)
The overall Federal Loan Lifetime Limit is now $257,500 for all federal loans combined.
Repayment Plans
All current plans have been replaced with the following options for borrowers:
Standard Plan:
- Fixed monthly payments over 10-25 years, depending on the initial balance.
- Those who choose this plan will have the same monthly payment regardless of income
Repayment Assistance Plan (RAP):
- Payments are based on income (1%-10% of income, with $50 reduction for each dependent)
- The minimum monthly payment is $10, and payments are set as a percentage of income.
Income-Based Repayment (IBR) Changes:
- No longer requires "partial financial hardship" to qualify
- Payments are also equal to 10% of discretionary income
- Forgiveness occurs after 20 years
Schedule of Reduction (SOR)
Starting with the Fall 2026 term, federal student loans for students enrolled less than full-time are subject to Schedule of Reduction (SOR) requirements. This means federal student loans for students enrolled less than full-time will be reduced in proportion to a student's actual enrollment.
At TAMUCC, full-time enrollment is defined as the following:
- 12 or more hours per term for undergraduate programs
- 9 or more hours per term for graduate programs
- This can be met for mini session students through 3 hours in mini session one and 6 hours in mini session two
Schedule of Reduction (SOR) requirements are applicable to all Subsidized/Unsubsidized Federal Direct Loans and Graduate PLUS loans offered under the legacy provisions. At least half-time enrollment is still required for receipt of a federal direct loan.
See below for examples and details of the reductions. Please be advised: there is no legacy provision for Schedule of Reduction (SOR) requirements.