Federal Student Aid Updates
Working Families Tax Cuts Act (WFTCA), also known as the One Big Beautiful Bill Act (OBBBA)
The Working Families Tax Cuts Act (WFTCA), also known as the One Big Beautiful Bill Act (OBBBA), was signed into law by President Trump on July 4, 2025. The legislation includes significant changes to federal student aid programs. The changes are expected to be effective July 1, 2026, for the 2026-2027 academic year forward. The changes are outlined below.
Federal Direct Loan Proration for Less Than Full-Time Enrollment
Annual (academic year) limits will be prorated based on the student’s enrollment status. In order to be eligible for the full annual loan limit a student must be enrolled at full-time status each academic year, which is composed of 3 quarters. Full-time enrollment is defined as 36 credits completed in an undergraduate program and 24 credits completed in a graduate program in an academic year. Please note that a student may be unable to maintain full-time enrollment due to program completion requirements, course sequencing, or limited class availability.
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Undergraduate Enrollment Example
| Credit Hours Enrolled in Academic Year | Proration Percentage | Dependent Student Annual Loan Limit (First Year Annual Loan Limits Used) | Independent Student Annual Loan Limit (First Year Annual Loan Limits Used) |
|---|---|---|---|
| 36 credits | 100% | $5,500* Disbursed equally throughout the academic year (i.e., each term) | $9,500* Disbursed equally throughout the academic year (i.e., each term) |
| 24 credits | 67% | $3,685* Disbursed proportionally or equally throughout the academic year (i.e., each term) | $6,365* Disbursed proportionally or equally throughout the academic year (i.e., each term) |
| 18 credits | 50% | $2,750* Disbursed proportionally or equally throughout the academic year (i.e., each term) | $4,750* Disbursed proportionally or equally throughout the academic year (i.e., each term) |
*Depending on the student’s eligibility or Student Aid Index (SAI), loans could be subsidized, unsubsidized, or a combination of both.
Graduate Enrollment Example
| Credit Hours Enrolled in Academic Year | Proration Percentage | Graduate Student Annual Loan Limit |
|---|---|---|
| 24 credits | 100% | $20,500 Disbursed equally throughout the academic year (i.e., each term) |
| 16 credits | 67% | $13,735 Disbursed proportionally or equally throughout the academic year (i.e., each term) |
| 12 credits | 50% | $10,250 Disbursed proportionally or equally throughout the academic year (i.e., each term) |
PLUS Loans for Parents
| Type of Amount | Pre-OBBBA Limit | New Limit |
|---|---|---|
| Annual Amount (Each Academic Year) | No Limit | $20,000 on behalf of each student from a parent |
| Aggregate Amount | No Limit | $65,000 on behalf of each student from all parents’ combined borrowing* |
*It is important to note that parent A & B can only borrow up to $65K per each dependent student.
Graduate Students
| Type of Loan | Pre-OBBBA Limit | New Limit |
|---|---|---|
| Aggregate Federal Loan Limit | $138,500 (includes both undergraduate & graduate loans received) | $100,000 (includes all Subsidized and Unsubsidized loans received for graduate programs only for borrowers who are not and have never been professional students) |
| Graduate PLUS Loans | Cost of attendance minus other aid (Direct PLUS Loans for graduate or professional borrowers only) | Direct PLUS Loans for graduate borrowers are no longer available |
Lifetime Maximum Loan Limit for All Student Borrowers
| Amount | Pre-OBBBA Limit | New Limit |
|---|---|---|
| Total Amount |
$138,500 (for non-professional students & not more than $23,000 can be subsidized) includes subsidized and unsubsidized loans received. Ability to pay loans down & borrow additional funding up to $138,500 again $224,000 for Health Profession Students (Not more than $65,500 of this amount may be from subsidized loans). Ability to pay loans down & borrow additional funding up to $224,000 again. |
$257,500 (not more than $23,000 can be subsidized) and includes subsidized, unsubsidized, and GRAD PLUS loans received regardless of amounts paid, canceled, or discharged |
Pell Grant Eligibility Changes
- Students with nonfederal scholarships that cover the full cost of attendance may not receive Pell Grant funding.
- Students with a Student Aid Index (SAI) equal to or greater than twice the maximum Pell Grant amount will be ineligible for Pell Grant funding.
Loan Repayment Plans
- New borrowers will be required to select from one of the following repayment plans.
- Repayment Assistance Plan (RAP): Monthly payments will be based on your income.
- Standard Repayment Plan: Monthly payments are fixed for a term of 10, 15, 20 or 25 years.
- All other repayment plans are ending on July 1, 2028. Students on a different plan must switch to one of the new plans by July 1, 2028. Contact ECMC Solutions or your servicer to discuss repayment plan options. Read more about loan repayment resources
Additional Resources
- Federal Student Aid:
- Video: Big Beautiful Bill—What It Means to Student Loans