Students applying for financial aid for the 2026-2027 school year are entering a landscape that looks significantly different from last year, with reduced aid amounts and programs eliminated as a result of the One Big Beautiful Bill Act, signed into law by the Trump administration in 2025.
The Free Application for Federal Student Aid is largely impacted by the OBBBA, with various changes to programs falling under its loan distribution — Pell Grants, Federal Work Study Grants and Graduate PLUS Loans, among many others.
FAFSA originally reviewed the number of dependents under a single household. This means the amount of aid awarded to a student’s guardian accounted for the financial burden of having multiple children.
OBBBA eliminated this aspect of the application, leading to financial implications such as a smaller aid award.
Tulane University junior Samuel Elliot, who receives financial aid, worries that this change could reduce the aid he depends on.
“If that limits my aid … that would be detrimental, because that money sustains multiple people.”
The FAFSA form is redesigned to be shorter, taking only 15 minutes to fill out. Elliot is concerned that this change may indicate that fewer factors will be considered in awarding aid.
“I don’t think that a simplification should also mean less loans. It kind of screws people who are dependent on them,” Elliot said.
The popular Federal Parent PLUS loan assists parents of dependent students with the cost burden of tuition that is not curtailed by other available aid. Starting July 2026, Parent PLUS loans cannot exceed $20,000 annually, and $65,000 at the aggregate level.
Pell Grant eligibility is limited with the new bill and extends to shorter, career-oriented programs under the title of Workforce Pell Grant. Students receiving enough non-federal grant money to cover university tuition are no longer eligible to apply for a Pell Grant.
The Graduate PLUS Loan, which could cover up to the full cost of graduate-level education tuition, is now eliminated. Current Graduate PLUS users qualify for continued loan use until 2029 under a legacy provision.
Loans will also be reduced for part-time students, with eligibility for the full loan amount requiring enrollment in a full-time course load. Loan eligibility will not be fixed, and it will be dependent on the number of credit hours a student is enrolled in.
The current selection of income-driven repayment plans is being replaced entirely, with the single Repayment Assistance Plan. The previous plans allow $0 monthly payments for low-income households, but RAP requires $10 per month, regardless of the household’s income at the time of payment.
The lifetime borrowing caps for federal student loans have become stricter, with a total limit of $257,500. Prior to OBBBA, the cap was not consolidated for all federal funds, with lifetime caps for individual programs.
Many changes will officially go into effect on July 1, 2026, but those who took out loans before this date will continue to access their original contracts until July 2028.
“The Office of Financial Aid continues to support a high volume of students and families each year, and we share updates and clear guidance to help students navigate any changes,” Robyn Kiper, Tulane Office of Financial Aid director of undergraduate programs, said. “Tulane remains committed to access and affordability for students from all backgrounds.”