STUDENT FINANCIAL SERVICES

FEDERAL STUDENT AID CHANGES (OBBBA)

One Big Beautiful Bill Act / “Working Families Tax Cuts Act”

The One Big Beautiful Bill Act (OBBBA), signed into law on July 4, 2025, introduces significant changes to federal student financial aid programs. Colleges and universities across the country are actively updating guidance as federal agencies release additional details.

Hofstra is continuing to monitor this legislation and will update this page as more information becomes available from the University and the U.S. Department of Education (ED).

Major Changes to Federal Student Aid

1. Elimination of Graduate PLUS Loans

Grad PLUS loans will be eliminated for new borrowing after June 30, 2026
Graduate student borrowers will need to rely on:
- Federal Direct Unsubsidized Loans (with limits)
- Private loans

“Legacy Borrower” Protections: If you are staying in the same program from Spring 2026 and remain continuously enrolled, you will be able to borrow Graduate PLUS loans for a limited amount of time to complete your degree

2. Parent PLUS Loans (Undergraduate Students)

Current Limits (before July 1, 2026)	Changes Effective July 1, 2026
Annual Limit: borrow up to cost of attendance Aggregate Limit: No limit Eligibility is based on parent credit check and half-time enrollment	Annual Limit: $20,000 per student (combined from all parents) Aggregate Limit: $65,000 per student Legacy Provision: Students with any existing Direct Loan may continue borrowing for up to 3 years or until program completion, whichever is less. Students must also remain in the same major (i.e., academic program) to be eligible for loans under this provision. New Borrowers: Families may need to explore alternative financing options

Current Limits (before July 1, 2026)

Changes Effective July 1, 2026

Annual Limit: borrow up to cost of attendance

Aggregate Limit: No limit Eligibility is based on parent credit check and half-time enrollment

Annual Limit: $20,000 per student (combined from all parents)

Aggregate Limit: $65,000 per student

Legacy Provision: Students with any existing Direct Loan may continue borrowing for up to 3 years or until program completion, whichever is less. Students must also remain in the same major (i.e., academic program) to be eligible for loans under this provision.

New Borrowers: Families may need to explore alternative financing options

3. Changes to Federal Loan Borrowing Limits

New caps introduced for graduate/professional students:

Current Limits (before July 1, 2026)	Changes Effective July 1, 2026
Annual Limit: $20,500 Aggregate Limit: $138,500 (includes undergraduate borrowing)	Graduate Students: Loans must be prorated based on enrollment status Annual limit remains $20,500 Aggregate limit = $100,000 (excludes undergrad borrowing) Professional Students: Professional students (JD, MD, PhD Appl Organizational Psychology, PhD Clinical Psychology, PsyD School-Community Psychology) Loans must be prorated based on enrollment status Annual limit = $50,000 Aggregate limit = $200,000 Total Aggregate Limit: $257,500 across all federal loan programs (undergraduate and graduate)

Current Limits (before July 1, 2026)

Changes Effective July 1, 2026

Annual Limit: $20,500
Aggregate Limit: $138,500 (includes undergraduate borrowing)

Graduate Students: Loans must be prorated based on enrollment status Annual limit remains $20,500 Aggregate limit = $100,000 (excludes undergrad borrowing)
Professional Students: Professional students (JD, MD, PhD Appl Organizational Psychology, PhD Clinical Psychology, PsyD School-Community Psychology) Loans must be prorated based on enrollment status Annual limit = $50,000 Aggregate limit = $200,000
Total Aggregate Limit: $257,500 across all federal loan programs (undergraduate and graduate)

4. Loan Proration (All Borrowers)

Starting in the 2026–2027 school year, federal student loan amounts will depend on how many classes you take. This applies to Direct Subsidized, Unsubsidized, and Graduate PLUS loans.
If you’re not enrolled full-time, you’ll receive less loan money based on your number of credits. So, part-time students—both undergraduate and graduate—may get less funding than full-time students.
This rule applies to both new students and existing borrowers. Parent PLUS loans are not affected by this change.
- Examples:

Undergraduate

enrolled in 9 credits; 12 credits is full time
- 9 credits divided by 12 credits = 75%. Full time eligible for $2,750 per term ($5,500 per year). $2,750*75% = $2,062 of loan eligibility.

Graduate

enrolled in 6 credits; 9 credits is full time

6 credits divided by 9 credits = 66.67% or 67% (round to the nearest whole percent). Full time eligible for $10,250 per term ($20,500 per year). $10,250*67% = $6,867 of loan eligibility.

5. Pell Grants & Full Scholarships

Students whose Cost of Attendance (COA) is fully covered by non-federal aid will no longer be eligible for a Federal Pell Grant.
Ends the previous allowance for Pell Grants to exceed COA when combined with other aid

Example: A Pell-eligible student with an athletic scholarship covering the full Cost of Attendance will no longer receive both the scholarship and the Pell Grant

6. Changes to Repayment Plans

Federal loan repayment options will be restructured

Current Plans (before July 1, 2026)	Changes Effective July 1, 2026
Fixed-Term Plans: Standard Repayment Graduated Repayment Extended Repayment Income Sensitive Repayment Income-Driven Plans (IDR): Income-Based Repayment (IBR) Pay As You Earn (PAYE) Saving on a Valuable Education (SAVE) Replaced Revised Pay As You Earn (REPAYE)	First Loan Borrowed on or after July 1st, 2026 New Standard Repayment Plan: Four Fixed-Terms: 10 years: balances <$25,000 15 years: balances between $25,000–$49,999 20 years: balances between $50,000–$99,999 25 years: balances $100,000+ Only 10-year plans qualify for Public Service Loan Forgiveness (PSLF). Note: PSLF requires at least 10 years

Current Plans (before July 1, 2026)

Changes Effective July 1, 2026

Fixed-Term Plans:
- Standard Repayment
- Graduated Repayment
- Extended Repayment
- Income Sensitive Repayment
Income-Driven Plans (IDR):
- Income-Based Repayment (IBR)
- Pay As You Earn (PAYE)
- Saving on a Valuable Education (SAVE)
- Replaced Revised Pay As You Earn (REPAYE)

First Loan Borrowed on or after July 1st, 2026

New Standard Repayment Plan:
- Four Fixed-Terms:
  - 10 years: balances <$25,000
  - 15 years: balances between $25,000–$49,999
  - 20 years: balances between $50,000–$99,999
  - 25 years: balances $100,000+
Only 10-year plans qualify for Public Service Loan Forgiveness (PSLF). Note: PSLF requires at least 10 years

7. Leaves of Absences or Withdrawals from Programs

Students who take a leave of absence (LOA) or withdraw from their program on or after July 1, 2026, will lose their legacy borrowing protections.

Frequently Asked Questions

Will this affect my student right now?

No. These changes do not impact current financial aid for the 2025–26 year.

Will Parent PLUS loans still be available?

Yes, but with new borrowing limits starting in 2026.

Should we be concerned?

There’s no immediate impact, but planning ahead will be important—especially for future years.

Where can we get help?

Hofstra’s Office of Student Financial Services is here to support you. We encourage families to reach out with questions or to review their individual situation.

Final Note Hofstra will continue to monitor federal guidance and update families as more information becomes available. Our goal is to make sure you have clear, timely information to help you plan with confidence.

Before Vs. After Comparison Chart

Federal Financial Aid: What’s Changing

Area	Before (Current System)	After (Starting 2026–27)
Parent PLUS Loans	Can borrow up to full cost of attendance (minus aid)	Annual and lifetime borrowing caps (approx. $20K/year, $65K total)
Graduate PLUS Loans	Available to cover remaining costs	Eliminated for new borrowing after June 30, 2026
Graduate Loan Limits	Higher and more flexible borrowing	Lower capped limits (fixed annual & total amounts)
Current Students	Continue borrowing under current rules	May be “grandfathered” for a limited time
Pell Grants	Based on current FAFSA calculations	Eligibility and calculation updates expected
Repayment Plans	Multiple income-driven options	Fewer/modified repayment options (details pending)
Impact Timing	Applies now	Begins July 1, 2026

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