The One Big Beautiful Bill Act and Financial Aid

What has changed?

• The Graduate PLUS Loan program will be eliminated for new borrowers effective July 1, 2026.

Legacy provision:

• Students who have borrowed a federal loan in their current Graduate program prior to July 1, 2026 may continue to apply for and borrow Graduate PLUS Loans up to their cost of attendance.
• Valid for up to 3 academic years or until degree completion, whichever comes first.
• Must remain continuously enrolled at Pace University; a leave of absence will end this eligibility.

What has changed?

• Per student aggregate limit of $65,000
• Eligible parents may borrow a maximum of $20,000 per aid year.
  • Parents who borrow more than $16,250 per aid year may have limited remaining eligibility available for their student's 4th year.
• Effective July 1, 2026

Legacy provision: 

• Students or Parents who borrowed a federal loan before July 1, 2026 may continue applying for and borrowing these loans up to the student's cost of attendance.
• Valid for up to 3 academic years or until degree completion, whichever comes first.
• Students must remain continuously enrolled at Pace University; a leave of absence ends this eligibility.

What has changed?

• Graduate students may borrow a maximum of $20,500 per year.
  • Lifetime aggregate limit of $100,000.
• Professional students may borrow a maximum of $50,000 per year.
  • Lifetime aggregate limit of $200,000.
  • A professional student is enrolled in a program that leads to a professional degree, typically at the doctoral level, and prepares students for licensed practice in a specific profession. 
  • At Pace, Law and Clinical Psychology are considered professional programs.
• Undergraduate loans do not count towards the Graduate aggregate limits.
• Effective July 1, 2026.

Legacy provision: 

• Students who borrowed a federal loan before July 1, 2026, may continue to borrow up to their cost of attendance.
• Valid for up to 3 academic years or until degree completion, whichever comes first.
• Students must remain continuously enrolled at Pace University; a leave of absence ends this eligibility.

What has changed?

• Institutions must prorate annual loan eligibility based on a student's enrollment level.
• If a student is enrolled half-time, they would only be eligible for 50% of their annual loan eligibility.
• Effective for all loans disbursed for the 2026-2027 award year.

What does this mean?

• Federal loans are now treated as annual loans tied to enrollment for the full academic year.
• Loans for standard academic year enrollment (Fall and Spring) must be split evenly across both terms.
  • No more than 50% may be disbursed for a single term.
• If enrollment changes mid-year, remaining loan disbursements must be adjusted to reflect the updated enrollment.

What has changed?

• Family-owned assets, such as small business and primary-residence farms, are excluded from Student Aid Index (SAI) calculations.

What does this mean?

• SAI is a number calculated from information provided on the Free Application for Federal Student Aid (FAFSA) that determines aid eligibility.
• A lower SAI means higher financial need.
• Excluding these assets could increase a student's aid eligibility.

What has changed?

• Students who receive grants or scholarships from non-federal sources that covers their full cost of attendance are ineligible to receive a Pell Grant.
• Students are no longer eligible for Pell Grant when a student's SAI equals or exceeds twice the maximum Pell award.

What does this mean?

• The maximum Pell grant for the 2026-2027 academic year is currently set at $7,395.
  • Students with an SAI greater than or equal to 14,790 are ineligible.

What has changed?

• Borrowers who borrow new loans on or after July 1, 2026, will have 2 repayment plan options:
  • The Standard Repayment Plan or the Repayment Assistance Plan (RAP).
  • If no plan is chosen, borrowers will be placed in the Standard Repayment Plan automatically.

What does this mean?

• All loans must be repaid under the same repayment plan.
• Borrowers with loans borrowed prior to July 1, 2026, who borrow again after that date, will be limited to the new Standard Repayment Plan or RAP.
• Standard Repayment Plans have fixed payments that can span 10-25 years.
• RAP is income-based with forgiveness after longer terms.

What has changed?

• Borrowers who do not take out new loans on or after July 1, 2026, may continue using current repayment plans.
• Students may remain in or switch between existing income-driven plans through July 1, 2028.

What does this mean?

• Borrowers currently enrolled in the Income Contingent Repayment (ICR), Pay As You Earn (PAYE), or Savings on a Valuable Education (SAVE) plan must choose a new repayment plan (either Standard or RAP) by July 1, 2028.
• If no choice is made, borrowers will automatically be placed in RAP.

What has changed?

• Economic hardship and unemployment deferments will no longer be available.
• Effective July 1, 2027.

What does this mean?

• Borrowers with loans borrowed on or before July 1, 2027 may continue to use these deferment options under the current rules. 
• Once those loans are paid off, these deferments will no longer be available. 

What has changed?

• A new accountability measure will remove Direct Loan eligibility from programs that fail the federal "low-earnings" standard in 2 out of 3 years.
• Effective July 1, 2026.

What does this mean?

• Undergraduate programs: Compares the median earnings of graduates 4 years after program completion with the earnings of "working adults" with only a high school degree or GED, who are not enrolled in higher education.
• Graduate programs: Compares the median earnings of graduates 4 years after program completion with the earnings of "working adults" with only a bachelor's degree who are not enrolled in higher education.
• Programs that fail this "low earnings" standard must provide warnings to students.

What has changed?

• Private institutions with larger endowments will face higher investment income taxes, with rates increasing from 1.4% to 8%.
• Effective taxable years beginning after December 31, 2025.

What does this mean?

• Private institutions enrolling fewer than 3,000 tuition-paying students in the prior tax year are exempt from the proposed endowment tax.