One Big Beautiful Bill Act
Anticipated Impacts on Financial Aid Resulting from the "One Big Beautiful Bill Act"
On July 4, 2025, President Donald Trump signed into law the "One Big Beautiful Bill Act," a comprehensive budget that will transform the landscape of our federal student aid programs. Key changes, including updates to Pell Grants, federal student loans, repayment plans and the 2026-2027 FAFSA application, are set to take effect on or after July 1, 2026.
The Office of Financial Aid is closely monitoring developments related to this “Big Beautiful Bill Act” and will continue to collaborate with the National Association of Student Financial Aid Administrators (NASFAA) and the U.S. Department of Education to seek further clarification and guidance as implementation of these changes progresses.
Big Beautiful Bill Changes
Federal Pell Grant (eligible only for first-time undergraduate degrees):
• Students who receive grants and scholarships from non-federal sources that cover the full cost of attendance will not be eligible for a Pell Grant. (Effective July 1, 2026 and beginning with the 2026-2027 academic year)
• Students who have a Student Aid Index that exceeds twice the maximum Pell Grant amount will not be eligible for a Pell Grant. For example, the current max Pell amount for 2025-2026 is $7,395. If a student has a student aid index (SAI) of $14,790 or greater, the student will not be eligible for a Federal Pell Grant. (Effective July 1, 2026 and beginning with the 2026-2027 academic year)
• Effective with the 2026-2027 FAFSA Application, Foreign income must be included in the Adjusted Gross Income (AGI) used to calculate Pell Grant eligibility. This will automatically be added into the AGI when determining Pell Grant eligibility.
Federal Direct Loan Program
(Parent Plus and Graduate Plus borrowing as of July 1, 2026)
Undergraduate (Parent Plus Loan):
• Parent PLUS Loan borrowers will be subject to new borrowing limits. Parents of undergraduate dependent students will be able to apply for a Parent PLUS Loan for up to $20,000 per academic year per student, with a lifetime maximum of $65,000 per student.
Graduate (Graduate Plus Loan):
• Beginning July 1, 2026, the Graduate Plus Loan will be discontinued and will no longer be available as a loan option.
Federal Loan Program Lifetime Limits
• All new federal student loan borrowers will have a lifetime borrowing maximum on all federal student loans of $257,500 (this amount excludes Parent Plus loans).
Parent Plus and Graduate Plus Loans
How do the changes highlighted above affect our current Parent Plus and Graduate Plus loan borrowers?
Undergraduate (Parent Plus Loan):
Parent Plus loan borrowers who borrow before July 1, 2026, will be grandfathered under current loan rules, even after the new rules take effect.
• Parent PLUS Loans: If a borrower has a Parent PLUS loan which is made before July 1, 2026, while the dependent student is enrolled in a credentialed program, the parent can continue to borrow under current 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.
Graduate (Graduate Plus Loan):
Graduate Plus loan borrowers who borrow before July 1, 2026, will be grandfathered under current loan rules, even after the new rules take effect.
• Graduate PLUS Loans: If a borrower has a Graduate PLUS loan made before July 1, 2026, while enrolled in a credentialed program, the borrower can continue to borrow from the program (up to the cost of attendance) for three academic years or the remainder of their expected time to credential, whichever is less.
• If a borrower has a Direct Unsubsidized Loan made before July 1, 2026, while enrolled in a credentialed program, the borrower can continue to borrow under current loan limits (graduate students up to $138,500 and up to $224,000 for professional students) for three academic years or the remainder of their expected time to credential, whichever is less.
Student Repayment Options
Effective July 1, 2026, with new loan borrowers on or greater than this date:
• Standard Repayment Plan: Standard plans will be available with fixed payment terms of 10, 15, 20 or 25 years based on the amount borrowed.
• Repayment Assistance Plan (RAP) will take the monthly payment amount between 1-10% of the borrower’s income, based on their Adjusted Gross Income ($10 minimum monthly payment, 30-year repayment period). If a borrower makes an on-time payment that reduces their principal by less than $50, ED will cover the difference, up to the amount paid. Interest will not accrue on unpaid balances.
• All new Parent PLUS loans must be repaid under the standard repayment plan; they are not eligible for RAP. If a borrower chooses RAP but has a loan that is not eligible, they must repay the ineligible loan(s) separately.
• Economic hardship and unemployment deferments will not be available. Borrowers with loans made on or before July 1, 2027, are still able to use these deferment options under the current rules. Once all borrower’s loans made prior to that date are paid in full, these options will cease to exist.
How will the Repayment Options affect our current student and parent borrowers who borrowed before July 1, 2026?
Undergraduate and Graduate
• Current borrowers with no new loans after July 1, 2026, are eligible to enroll in the current Standard, Graduated, Extended or Income-Based repayment plans, and can also choose the new RAP. Borrowers enrolled in ICR, PAYE or SAVE plans must switch to a different repayment plan by July 1, 2028.
• For those who had borrowed Parent PLUS Loans before July 1, 2026, and subsequently borrowed from the program on or after that date, repayment for all loans must be under the same repayment plan, of which the only eligible plan for Parent PLUS borrowers is the standard plan.
2026-2027 FAFSA Changes
FAFSA Asset Exemptions, which are excluded from the Student Aid Index (SAI) calculation:
The net worth of a family-owned business with 100 or fewer full-time (or full-time equivalent) employees.
The net worth of a farms on which the family resides.
The net worth of a commercial fishing business and related expenses, owned and controlled by a family.
The Office of Financial Aid at Stevens Institute of Technology is committed to supporting students and their families during this time. While we may not have immediate answers to every question, we will continue to share updates with the campus community as new information becomes available from the U.S. Department of Education. Please reach out to the Office of Financial Aid at 201.216.3400 or via email at [email protected] if you have any questions.