Policy Changes Effective July 1, 2026: Loan Limits and Workforce Pell Grants
July 1st, 2026, represents a day of sweeping changes brought by the “One Big Beautiful Bill Act” (H.R.1, or OBBA), and students can expect to see an immediate impact on FAFSA grants and loans. While some of the programs are intended to expand access to financial aid, a number of these changes will end up placing broad restrictions and even caps on the amount of aid student households will be eligible for. Here are the key changes that students and families should be aware of for the upcoming year.
PLUS Loan Changes and Aggregate Loan Limits
The Parent PLUS loan program will now feature an annual cap of $20,000, with a lifetime maximum of $65,000 per student. For those students, the Parent PLUS cap is an absolute maximum, meaning they will not be eligible to receive additional unsubsidized loans beyond the $20,000 limit that year. This also means that students who require the maximum Parent PLUS loan to attend school risk significant financial gaps by their senior year.
The Grad PLUS loan has been eliminated entirely, and graduate students will face a cap of $20,500 annually, with an aggregate cap of $100,000. However, qualifying professional students will be able to receive $50,000 annually, with an aggregate cap of $200,000.
Between undergraduate and graduate studies, independent students will now face a lifetime cap of $257,000 for all Direct Loans (subsidized and unsubsidized).
Expanded Eligibility for Pell Grants Funding Certification Programs
The Federal Pell Grant program is intended to help students from low-income backgrounds receive assistance when pursuing degrees from accredited institutions. While it was previously possible to apply Pell grants to trade certificate programs, the new regulations make it easier for students to apply Pell funds to programs that support high-need labor fields. For 2026-2027, the Pell grant will be worth $7,395. A chart breaking down the eligibility requirements for trade programs is below.
While the changes represent a significant shift in the financial-planning landscape for post-secondary students, it remains imperative to secure funding from independent sources and agencies to avoid student loan debt. These changes are an attempt to mitigate the total amount of debt that a student-household incurs while pursuing an education but can also represent barriers for students pursuing programs that are more costly. If you want to learn more about ways to source financial aid for your education, check out our College Cash webpage here.