The One Big Beautiful Bill Act

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On July 4, 2025, President Donald J. Trump signed into law the One Big Beautiful Bill Act, which made changes to the higher education landscape. Several provisions went into effect immediately, while others will begin on July 1, 2026, and beyond. 


St. John’s University’s Office of Student Financial Services is committed to helping students and their families navigate these changes in federal aid programs. We will continue to share updates with the University community as additional guidance becomes available from the US Department of Education.


Important notice: The information shared on this page is evolving. The University will update it as new information is received. Students and their families are encouraged to monitor studentaid.gov for more information.
 

More Information

Beginning with the 2026–27 aid year, the Student Aid Index asset calculation excludes the following from the current net worth of business and farms and should not be reported as assets on the Free Application for Federal Student Aid (FAFSA®) form:

  • The current net worth of family-owned business (with fewer than 100 full-time employees or full-time equivalent).

  • The net worth of farms on which the family resides.

  • The net worth of family-owned-and-controlled commercial fishing business and related expenses.

Beginning with the 2026–27 award year:

  • The foreign earned income exclusion amount reported on the FAFSA® will be added to the adjusted gross income when determining Federal Pell Grant eligibility.
  • Students who receive nonfederal grants or scholarships covering the full Cost of Attendance will be ineligible for a Federal Pell Grant.
  • Students with a Student Aid Index (SAI) equal to or greater than twice the maximum Federal Pell Grant award amount for the award year will be ineligible for the grant.
    • For example, if the max Pell amount for 2026–27 is $7,395, and a student has an SAI index of 14,790 or greater, the student will not be eligible for a Federal Pell Grant.
    • A limited exception applies for dependents of deceased service members and safety officers.
       

Annual Amount Proration for Less than Full-Time Enrollment

Loan amounts will be prorated based on enrollment status. Less than full-time equals reduced eligibility. Enrollment status is determined by degree-applicable coursework.

Lifetime Borrowing Cap for All Federal Student Loans (Effective July 1, 2026)

Change Description

Lifetime borrowing limit on all federal student loans: $257,500

  • Combined undergraduate + graduate + professional
  • Excludes borrowed Federal Parent Direct PLUS loan amounts (in the case of a dependent student who had a PLUS loan borrowed on their behalf)
     

Legacy Provision: Students who were enrolled in a program of study as of June 30, 2026, and a Direct Loan was made (disbursed) for that program of study prior to July 1, 2026, can continue to borrow under the pre-July 1, 2026, loan limits for three academic years or the remainder of their expected time to credential, whichever is less.

  • Expected time to credential is defined as the difference between the program length and the period of the program the student has completed as of the date of determination, where program length is the amount of time it takes a full-time student to complete the program.
  • Borrowers must continue to meet all federal program eligibility requirements and remain in the same degree program at the same school.
  • If a student withdraws or otherwise ceases enrollment in their program of study, they would no longer be eligible to borrow under this exception.
  • Students cannot opt out of this legacy provision and must continue to borrow under the pre-July 1, 2026, loan limits.

Federal Loan Repayment and Servicing 
The following revised income-based repayment (IBR) plans are effective now. 
Two new repayment plans have been established for borrowers who receive loans on or after July 1, 2026:

  • Standard Repayment Plan: Standard plans will be available with fixed payment terms based on the amount borrowed/outstanding balance.
  • Total outstanding principal less than $25,000: repayment period is 10 years
  • Total outstanding principal of not less than $25,000 and less than $50,000: repayment period is 15 years
  • Total outstanding principal not less than $50,000 and less than $100,000: repayment period is 20 years
    • Total outstanding principal of $100,000 or more: repayment period is 25 years
      • The Repayment Assistance Plan will take the monthly payment amount between one to 10 percent of the borrower’s income, based on their Federal Adjusted Gross Income ($10 minimum payment, 30-year repayment period).
    • If a borrower makes an on-time payment that reduces their principal by less than $50, the Department of Education will cover the difference, up to the amount paid. Interest will not accrue on unpaid balances.
      • Borrowers with loans made before July 1, 2026, who take out additional loans on or after July1, 2026, will have to move all loans to one of the new repayment plans.
  • Limits deferment and forbearances, effective July 1, 2027.
  • Expands options for borrowers with certain defaulted loans, effective July 1, 2027.


Federal Parent Direct PLUS Loan Program Changes (Effective July 1, 2026)

ChangeDescription

All parents (combined) may borrow $20,000 per year per dependent student with an aggregate limit of $65,000 (without regard to amounts forgiven, repaid canceled, or discharged).

  • Parent borrowers must meet all program eligibility requirements.
     

Legacy Provision: If a Federal Parent Direct PLUS loan was made (disbursed) for a dependent student before July 1, 2026, enrolled in a degree program before June 30, 2026, the parent borrower, provided they continue to meet all eligibility requirements, can continue to borrow for the student’s education for the same program of study at the same school under the pre July 1, 2026, loan limits (up to the Cost of Attendance) for three academic years or the remainder of their dependent student’s expected time to credential, whichever is less.

  • Expected time to credential is defined as the difference between the program length and the period of the program the student has completed as of the date of determination, where program length is the amount of time it takes a full-time student to complete the program.
  • If a student withdraws or otherwise ceases enrollment in their program of study, the parent would no longer be eligible to borrow under this exception.
  • Borrowers cannot opt out of the legacy provisions and must continue to borrow under the pre-July 1, 2026, loan limits.
    • For Parent Direct PLUS Legacy eligibility only, a student who changes majors within the same degree at the same school will be considered to be enrolled in the same program of study.
       

Changes to the Federal Graduate PLUS Loan Program (Effective July 1, 2026)

ChangeDescription
Effective July 1, 2026, the Federal Graduate PLUS Loan Program is discontinued.

Legacy Provision: Graduate/professional students who were enrolled in a program of study as of June 30, 2026, and had a Direct Loan for that program of study disbursed prior to July 1, 2026, can continue to borrow under the pre-July 1, 2026, loan limits for three academic years or the remainder of their expected time to credential, whichever is less.

  • Expected time to credential is defined as the difference between the program length and the period of the program the student has completed as of the date of determination, where program length is the amount of time it takes a full-time student to complete the program.
  • Borrowers must continue to meet all federal program eligibility requirements and remain in the same program of study at the same school.
  • If a student withdraws or otherwise ceases enrollment in their program of study, they would no longer be eligible to borrow under this exception.
  • Students cannot opt out of the legacy provisions and must continue to borrow under the pre-July 1, 2026, loan limits.

Changes to Federal Direct Unsubsidized Student Loan Limits for Graduate and Professional Students (Effective July 1, 2026)

ChangeDescription

Graduate (nonprofessional degree) 

  • $20,500 annual loan limit
  • Aggregate cap $100,000. (Graduate student who is not, and has not been, a professional student)

Professional degree (e.g., Law, Pharm.D., Clinical Psychology, Ph.D.)

  • $50,000 annual loan limit
  • Aggregate cap $200,000
  • Professional degree is defined in regulation at 34 CFR 668.2. The regulation provides some examples of programs that qualify (e.g., Law, Pharm.D., Clinical Psychology, Ph.D.)

Borrowers who are both graduate and professional students at some point in their educational careers may only borrow up to $200,000 in total for graduate and professional school.

  • Students must meet all federal program eligibility requirements.
  • Certain medical training programs (i.e., Pharm.D.) qualify for extra unsubsidized annual loan eligibility and aggregate unsubsidized loan limits (referred to as HEAL limits). The increased limit on this basis will be eliminated on July 1, 2026. 
     

Legacy Provision for Continuing Borrowers:  Students who were enrolled in a program of study as of June 30, 2026, and a Direct Loan was made (disbursed) for that program of study prior to July 1, 2026, can continue to borrow under the pre-July 1,2026 loan limits for three academic years or the remainder of their expected time to credential, whichever is less.
 

  • Expected time to credential is defined as the difference between the program length and the period of the program the student has completed as of the date of determination, where program length is the amount of time it takes a full-time student to complete the program.
  • Borrowers who withdraw or otherwise cease enrollment in their program of study would no longer be eligible to borrow under this exception.
  • Students cannot opt out of the legacy provisions and must continue to borrow under the pre-July 1, 2026, loan limits.
  • The additional (HEAL) limits only apply toward the graduate portion of the St. John’s Pharm.D. program. The University awaits further guidance from the US Department of Education on the applicability of this exception for the six-year Pharm.D. program.