Federal Loans: What's Changing in 2026

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.

Anticipated Changes beginning July 1, 2026

Federal Direct Subsidized/Unsubsidized Loans

• Eligibility for part-time students is expected to be prorated in direct proportion to the percent of full-time status the student is enrolled.
• Federal Subsidized/Unsubsidized Loan annual limits are unchanged for full-time students. Information about annual limits is available on this page.
• Undergraduate loans will count toward the new lifetime limit (see the All Students 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

• 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.
• Students are ineligible to receive a Pell Grant if their Student Aid Index (SAI) exceeds twice the maximum Pell Grant award for that year.
• Any foreign income will be included in the Adjusted Gross Income (AGI) used to calculate Pell Grant eligibility.

Federal Work Study

• No changes.

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.

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 are being finalized through the ED's negotiated rulemaking process.
• Eligibility for part-time students is expected to be prorated in direct proportion to the percent of full-time status the student is enrolled. We are awaiting clarification from the ED on the specific method of calculation.

Federal Loans

• 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).

Loan Proration for Students Enrolled < Full Time

• The new legislation includes a provision requiring the pro-ration of annual loan eligibility based on a student's enrollment level if it is less than full-time.
• We are awaiting guidance on the method that will be used to calculate eligibility.

Alternative Funding Options

• Grad PLUS will no longer be available to new borrowers as of July 1, 2026. Students should explore other financing options in advance, which may include:
  • Alternative loans
  • Employer-sponsored education benefits
  • External scholarships

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.