Financial Aid
Financial Aid

Federal Loans: What's Changing in 2026

Overview

The One Big Beautiful Bill Act (OBBBA) is a federal budget reconciliation package that was signed into law on July 4, 2025. OBBBA includes several significant changes to federal student aid programs that will take effect on July 1, 2026.

There are no changes to federal student aid programs for the spring 2026 term.

Saint Joseph’s will continue to monitor the evolution of this new legislation and provide clarification as more information and guidance are made available from the University and the U.S. Department of Education (ED). Please connect with Saint Joseph’s financial aid office at finaid@sju.edu or 610-660-2500 with specific questions about your financial aid package. 

The below information is intended to help the Saint Joseph’s community better understand the evolving federal student loan landscape. This information is based on our current understanding of the legislation and is not intended to be legal advice. It is not official guidance and should not be considered definitive. Please refer to federal government sources to review options and make the best decision for your personal circumstances. See studentaid.gov for more information.

Changes beginning Summer 2026 and July 1, 2026

Undergraduate Students

Federal Direct Subsidized/Unsubsidized Loans

  • Beginning with the Summer 2026 term, students enrolled less than full-time (12+ credits per semester for undergraduate) will have their annual loan limits reduced proportionally based on the percentage of the full-time enrollment.
  • Federal Subsidized/Unsubsidized Loan annual limits are unchanged for full-time students. Information about annual limits is available at Federal Student Aid - One Big Beautiful Bill Act – Important Definitions.
  • Undergraduate loans will count toward the new lifetime limit (see the Other Important Information section). 

Federal Parent PLUS Loans

  • All parents (combined) may borrow $20,000 per year per dependent student with a $65,000 aggregate limit per dependent student. This is a change from current rules, which allow borrowing up to the Cost of Attendance minus Other Financial Assistance without an aggregate limit.
  • If the student or parent borrower has a Federal Direct Loan disbursed before July 1, 2026, while the dependent student is enrolled in a credentialed program, the parent can continue to borrow under current loan limits for 3 academic years or the remainder of their dependent student’s expected time to credential, whichever is less.

Federal Pell Grants

Starting in the 2026-27 academic year (includes Summer 2026):

  • Students who receive grants or scholarships from non-federal sources covering their entire cost of attendance (COA) may be ineligible to receive a Pell Grant, even if otherwise eligible for the program.  For example, a student with a scholarship covering the full cost of attendance will no longer receive both the scholarship and the Pell Grant.
  • Students are ineligible to receive a Pell Grant if their Student Aid Index (SAI) exceeds twice the maximum Pell Grant award for that year.  For example, if the maximum Pell Grant is $7,395, students with an SAI over $14,790 will not qualify.  Pell award amounts continue to vary based on income and family size, but there is now cutoff tied to the annual Pell maximum.
  • Any foreign income will be included in the Adjusted Gross Income (AGI) used to calculate Pell Grant eligibility.

Federal Work Study

  • No changes.

Graduate Students

Graduate PLUS Loans

  • Graduate PLUS Loans will no longer be available to new borrowers starting July 1, 2026.
  • If a borrower has a Direct Loan disbursed before July 1, 2026 and continues to be enrolled in the same program of study at the same institution, the borrower can continue to borrow from the program for 3 academic years or the remainder of their expected time to credential, whichever is less.  Beginning with the Summer 2026 term, students enrolled less than full-time (6+ credits per semester for Graduate) will have their Grad PLUS loan reduced proportionally based on the percentage of the full-time enrollment

Graduate Unsubsidized Loans

  • Graduate students may borrow up to $20,500 per year, with an aggregate limit of $100,000.
  • Students in programs that meet the federal definition of Professional (currently limited to the PharmD program at SJU) will have a higher annual Unsubsidized Loan limit of $50,000 and an aggregate limit of $200,000. The specific criteria and the official list of qualifying professional programs can be found here.
  • Beginning with the Summer 2026 term, students enrolled less than full-time (6+ credits per semester for Graduate) will have their annual loan limits reduced proportionally based on the percentage of the full-time enrollment. 

Other Important Information

Federal Loans - Lifetime Limit

  • There is a new $257,500 lifetime borrowing limit on all federal student loans, excluding borrowed Parent PLUS loan amounts (in the case of a dependent student who had Parent PLUS borrowed on their behalf for education expenses). This cap applies to the total outstanding principal balance of your federal student loans, which includes Subsidized. Unsubsidized and Grad PLUS loans.  The new lifetime limit $257,500 includes student borrowing for undergraduate, graduate and professional study.  More information on the lifetime limit can be found under the Loan Limits section of the OBBBA announcement page at www.studentaid.gov. 

New Repayment Plans

  • OBBBA introduces significant changes to repayment plans.  New loans disbursed after July 1, 2026, will be subject to the new Repayment Assistance Program (RAP)
  • Students who borrowed loans before July 1, 2026, and will borrow a new loan after July 1, 2026, are limited to the new RAP or the standard plans for the new loan.
  • Borrowers with no new loans disbursed on or after July 1, 2026, can continue to enroll in the current Standard, current Income Based (IBR), Graduated and Extended repayment plans.  They can also opt in to the new RAP.  Current borrowers enrolled in ICR, PAYE or SAVE plans must transition to a new repayment plan by July, 1 2028.  If not selection is made by that date, they will be moved into RAP.
  • More information can be found at www.studentaid.gov - One Big Beautiful Bill Act Updates.  We also recommend you reach out to your loan servicer if you are currently paying back federal student loans.

Alternative Funding Options

Many details related to these changes are still subject to federal rulemaking and guidance from ED. Policies, procedures, and information on this page is subject to change as new details emerge. See studentaid.gov for more information. If you have any questions about your financial aid, contact SJU’s Office of Financial Aid.