Federal Student Aid Changes Under the One Big Beautiful Bill Act (OB3)
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Overview
On July 4, 2025, the One Big Beautiful Bill Act (OB3) was signed into law, introducing significant changes to federal student aid programs. Most provisions are scheduled to take effect on July 1, 2026, unless otherwise noted.
Wright State University is closely monitoring the implementation of these changes. While some information is currently available, many provisions require additional guidance from the U.S. Department of Education. The summary below reflects what is known at this time and is subject to change as U.S. Department of Education releases final regulations and guidance. We will continue to update this information as guidance is provided.
Changes to the FAFSA and Federal Pell Grant
FAFSA Asset Exemptions – Starting with the 2026-27 FAFSA
- Reinstates exemptions for
- Family farms
- Family-owned small businesses
- Expands exemptions to include family-owned commercial fisheries. These assets will be excluded from the Student Aid Index (SAI) calculation.
Foreign Income and Pell Grant Eligibility – Starting with the 2026-27 FAFSA
- Foreign income must be included in Adjusted Gross Income (AGI) when determining Pell Grant eligibility.
Full Cost of Attendance (COA) Scholarships and Grants – Starting with the 2026-27 FAFSA
- Students who receive non-federal grants or scholarships covering their entire cost of attendance are not eligible for a Pell Grant, even if they otherwise qualify.
Students with a High Student Aid Index (SAI) – Starting with the 2026-27 FAFSA
- Students with an SAI that exceeds twice the maximum Pell Grant award will be ineligible to receive a Pell Grant.
Changes to Federal Direct Loans
Elimination of the Graduate PLUS Loan Program - Effective July 1, 2026
Graduate and professional students will no longer have access to a longstanding federal funding option that historically allowed them to cover the full cost of attendance through the Federal Graduate PLUS Loan program. Students who need to finance their education and do not qualify for the Legacy Provision (see below) should research private/alternative loans. Wright State has provided a resource that allows students to view a list of lenders and compare terms. Please note that this list should not be considered comprehensive and that students are not limited to lenders on this list.
Legacy Provision for Current Students: Borrowers who received a Federal Direct Loan before July 1, 2026, while enrolled in a program of study, may continue borrowing under the Graduate PLUS program for up to three academic years or the remainder of their expected time to credential, whichever is less. To remain eligible for Legacy Provision status, borrowers must remain enrolled in the same program of study. We are awaiting clarification from the U.S. Department of Education regarding what qualifies as the “same program of study” under the Legacy Provision.
Parent PLUS Loan Annual and Aggregate Limits – Effective July 1, 2026
Parent PLUS Loans will be subject to new annual and aggregate borrowing limits per dependent student. These limits apply regardless of prior loan forgiveness, repayment, cancellation, or discharge.
- Parents (combined) may borrow:
- $20,000 per year per dependent student
- $65,000 aggregate limit per dependent student
Legacy Provision for Current Students: If the student or parent borrower received a Federal Direct Loan before July 1, 2026, while the dependent student was enrolled in a program of study, Parent PLUS borrowing may continue under current loan limits for up to three academic years or the remainder of the student’s expected time to credential, whichever is less. To remain eligible for Legacy Provision status, students must remain enrolled in the same program of study. We are still awaiting clarification from the U.S. Department of Education regarding what qualifies as the “same program of study” under the Legacy Provision.
Graduate and Professional Student Loan Limits – Effective July 1, 2026
Graduate and professional students will be subject to new annual and aggregate borrowing limits.
- Annual Loan Limits
- Graduate students: $20,500
- Professional students*: $50,000
- Aggregate Loan Limits
- Graduate students: $100,000
- Professional students*: $200,000
Amounts borrowed as an undergraduate do not count toward these limits. Borrowers who attend both graduate and professional programs may borrow no more than $200,000 total across both levels.
Legacy Provision for Current Students: Borrowers with a Federal Direct Loan made before July 1, 2026, while enrolled in a program of study, may continue borrowing under current limits for up to three academic years or the remainder of their expected time to credential, whichever is less. To remain eligible for Legacy Provision status, borrowers must remain enrolled in the same program of study. We are still awaiting clarification from the U.S. Department of Education regarding what qualifies as the “same program of study” under the Legacy Provision.
Professional Student Definition*: A professional student is a student enrolled in a program of study that awards a professional degree upon completion of the program. A professional degree is a degree that signifies both completion of the academic requirements for beginning practice in a given profession, and a level of professional skill beyond that normally required for a bachelor’s degree; is generally at the doctoral level, and requires at least six academic years of postsecondary education coursework for completion, including at least two years of postbaccalaureate level coursework; generally requires professional licensure to begin practice; and includes a four-digit program CIP code in the same intermediate group as the following fields: Pharmacy (Pharm.D.), Dentistry (D.D.S. or D.M.D.), Veterinary Medicine (D.V.M.), Chiropractic (D.C. or D.C.M.), Law (L.L.B. or J.D.), Medicine (M.D.), Optometry (O.D.), Osteopathic Medicine (D.O.), Podiatry (D.P.M., D.P., or Pod.D.), Theology (M.Div., or M.H.L.), and Clinical Psychology (Psy.D. or Ph.D.). A professional student may not receive title IV aid as an undergraduate student for the same period of enrollment; and must be enrolled in a program leading to a professional degree.
Federal Loan Program Lifetime Borrowing Limit – Effective July 1, 2026
Federal student loan borrowing will be subject to a lifetime cap, subject to the Legacy Provision (see below). This cap limits the total amount a borrower may receive across all federal student loan programs.
- Establishes a $257,500 lifetime borrowing cap on all federal student loans.
- Parent PLUS loans borrowed on behalf of a dependent student are excluded from this limit.
Legacy Provision for Current Students: Borrowers with a Federal Direct Loan disbursed before July 1, 2026, while enrolled in a program of study, may continue borrowing under current limits for up to three academic years or the remainder of their expected time to credential, whichever is less. To remain eligible for legacy provisions, borrowers must remain enrolled in the same program of study. We are still awaiting clarification from the U.S. Department of Education regarding what qualifies as the “same program of study” under the Legacy Provision.
Loan Proration for Enrollment Status – Expected Effective for the 2026-27 Award Year
- Institutions will be required to prorate annual loan amounts based on the student’s percentage of full-time enrollment.
