One Big Beautiful Bill Act Updates to Financial Aid

Some of these loan changes include “grandfathering” (legacy provisions), which may allow you to keep your current eligibility. However, changes like transferring schools, switching majors, or adjusting your academic plan could impact that eligibility. If you’re considering any changes, we strongly encourage you to reach out to our office first so we can help you understand how it may affect your financial aid.

Am I a new or active borrower?

• All loans must be paid under the same repayment plan, so whether you are a current or new borrower depends on how many loans you have taken out and when.

New borrower:

•  A student with no loans taken out prior to July 1, 2026 or all loans taken out during that time have been paid in full.

Active borrower:

• A student is enrolled in a program of study at an institution as of June 30, 2026; and a direct loan was made for such program of study prior to July 1, 2026 which has not been paid off.

Starting July 1, 2026:

One Big Beautiful Bill (OB3) sets a lifetime limit of $257,500 on the total amount a student can borrow in federal student loans. This limit applies to all federal student loans combined and does not include Parent PLUS loans (which are taken out by parents).

What This Means for You (Legacy/“Grandfathering” Option)

If you received a federal student loan before July 1, 2026, you may be able to continue borrowing under the current (higher) loan limits.

This “grandfathering” benefit lasts until: Three years after July 1, 2026, or you complete your current program of study.

At SFCC starting July 1, 2026, federal student loan amounts will be based on how many credits you’re taking each quarter, similar to how grant aid works.

• You must be enrolled at least half-time to receive a loan
• To receive your full loan amount, you must be enrolled full-time (12+ credits)
• If you take fewer than 12 credits, your loan will be reduced based on your credit load
• If you drop below half-time, your loan will be cancelled

What’s Changing

• Previously, students taking 6 or more credits (half-time) could receive their full loan amount. Now, your loan will be adjusted proportionally based on your enrollment each quarter.

Important to Know

• This adjustment (called a “schedule of reduction”) is ongoing throughout the quarter.
• If you drop or withdraw from classes, your financial aid may be recalculated
• This could mean a reduction in your loan, even after funds have already been disbursed. This reduction may be for the current quarter or impact future quarter amounts.
• In some cases, you may need to repay a portion of your loan
• There is no grandfathering (legacy exception) for this change.

If you’re thinking about adjusting your credits, please reach out to SFCC Financial Aid first—we can help you understand how it may impact your funding.

Parent PLUS loans will have new limits:

• $20,000 per year per student
• $65,000 total per student

Previously, there was no cap, and parents could borrow up to the full cost of attendance.

What This Means for Families

• The limits are per student, not per parent
• If a family has more than one student, parents can borrow up to the limit for each student separately
• Even if multiple parents want to borrow for one student, the combined total cannot exceed $20,000 per year or $65,000 overall

Legacy/“Grandfathering” Option

• If a Parent PLUS loan was received before July 1, 2026, the parent may be able to continue borrowing under the current (higher) limits.
  • This option lasts until: Three academic years after July 1, 2026, or the student completes their program (whichever comes first)

There are a couple of important updates to Pell Grant eligibility:

• If your scholarships, waivers, or other gift aid already cover your full Cost of Attendance, you will no longer be eligible to receive a Pell Grant
• If your Student Aid Index (SAI) is too high, you will not qualify for Pell Grant funding
  • Specifically, if your SAI is two times or more than the maximum Pell Grant amount, you will not be eligible
• Example: Using the 2026-2027 maximum Pell Grant of $7,395, students with an SAI of $14,790 or higher would not qualify