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One Big Beautiful Bill Act (OBBBA):
What You Need to Know

Effective for the 2026-2027 Academic Year (and beyond)

The One Big Beautiful Bill Act (OBBBA) was signed into law on July 4, 2025, introducing significant changes to federal student aid programs. Beginning July 1, 2026, these changes will impact how students and families pay for higher education.

This page is for informational purposes only and represents the current day understanding of the One Big Beautiful Bill Act’s proposed implementation by the U.S. Department of Education. The information is subject to change as we await official guidance.

Please visit the Federal Student Aid website for updates regarding the One Big Beautiful Bill Act (OBBBA).

General Loan Eligibility Updates
The OBBBA changes loan borrowing limits and sets new aggregate and lifetime borrowing limits for new and continuing borrowers. Knowing which category you belong to (new or continuing borrower) will determine which loan limits apply to you. In addition, knowing how much you have borrowed can also directly impact how much federal aid you will be eligible for moving forward. As a result of these new regulatory changes, some students may need to explore other financing options, such as private loans, to assist with college-related expenses, as they may no longer qualify for Direct Loans under the OBBBA. More information can be found in the Q&A section.

Legacy Provision for Current Students
Loan borrowers who received a Federal Direct Loan BEFORE July 1, 2026, while enrolled in the same program of study, may continue borrowing under the old (pre-OBBBA) loan aggregate and lifetime limits under a limited exception for a maximum of three (3) academic years, whichever is less. More information can be found in the Q&A section.

NEW BORROWER
Anyone who did not take out a loan during their current program of study BEFORE July 1, 2026, or anyone who will be starting a new degree program in the 2026-2027 academic year.

LOAN PRORATION
Institutions are now required to prorate federal student loan amounts based on the number of credits students are enrolled in. All students enrolled in less than full-time credits (less than 12 credits) may have their loan offer(s) prorated based on the credits enrolled. What has not changed is the minimum credit enrollment to be eligible for student loans. Students are still required to be enrolled in a minimum of 6 applicable credits to be eligible to borrow student loans.

FEDERAL PELL GRANT ELIGIBILITY
A student is now NOT eligible for the Federal Pell Grant if their total non-federal grants and scholarships already meet or exceed the Financial Aid Cost of Attendance (COA). 

Students whose SAI (Student Aid Index) is equal to or exceeds twice the maximum Federal Pell Grant amount for the award year are not eligible for the Federal Pell Grant, even if they otherwise meet the minimum Pell Grant eligibility requirements. More information can be found in the Q&A section.

Financial Aid Information

Frequently Asked Questions (Q&A)

Keep your Student record updated

Meet with my academic advisor

  • Make sure you’re going to meet all of your degree requirements.

Keep your student record updated.

Federal Pell Grant Eligibility Changes

Beginning with the 2026-2027 school year, the changes listed below will be in effect.

Students whose Student Aid Index (SAI) is equal to or exceeds twice the maximum Federal Pell Grant amount for the award year are not eligible for the Federal Pell Grant, even if they otherwise meet the minimum Pell Grant eligibility requirements.

  • For example, if the maximum Pell offer for the 2026-2027 school year is $7395 and the student has an SAI of 14,790 or higher, the student is not eligible for the Federal Pell Grant.

Students who receive non-federal grants or scholarships (such as state, institutional or private aid) that equal or exceed the full Financial Aid Cost of Attendance (COA) are not eligible for the Federal Pell Grant.

Federal Student Loan Changes

Beginning with the 2026-2027 school year, the changes listed below will be in effect.

  • Direct Loan Proration: Schools are now required to prorate student loan offers for those enrolled in less than full-time credits (less than 12 credits). 
  • New Loan Borrowing Limits for Direct Loan borrowers, as well as Parent PLUS Loan borrowers.
  • Legacy Provision.
  • Elimination of the Graduate Direct PLUS Loans: Starting July 1, 2026, the Graduate Direct PLUS Loan program will be eliminated for new Graduate and Professional student borrowers. 

Less Than Full-Time Loan Proration
Beginning with the 2026-2027 school year, students enrolled in less than full-time credits (less than 12 credits) will have their loan offer(s) prorated to match the credits enrolled in. NOTE: What hasn’t changed is students still need to be enrolled for a minimum of 6 applicable credits towards their Leeward CC degree program.

Lifetime Aggregate Limit
The new lifetime aggregate limit is $257,500. Please refer to the chart below for more information. You may also visit Federal Student Aid to view the new loan limits. 

New loan borrowing limits under the OBBBA:

BORROWER TYPE ANNUAL LIMIT LIFETIME LIMIT
Undergraduate $5,500 – $12,500 $31,000 – $57,500
Parent PLUS* $20,000 per student* $65,000 per student*
Graduate* $20,500* $100,000*
Total Lifetime Cap N/A $257,500*

*The total lifetime amount of $257,500 includes all undergraduate, graduate, and professional loans combined, even if these loans may have been repaid, discharged or forgiven.

Undergraduate Loan Limits
Federal Direct and Federal Direct Unsubsidized Loan Limits remain the same.
Federal Direct Parent PLUS Loan Limits (beginning with the 2026-2027 school year)

  • Annual Limit (maximum amount eligible to borrow each academic year): $20,000 (on behalf of each student)
  • Aggregate Limit (maximum total that can be borrowed during the course of a student’s entire education): $65,000 (on behalf of each student from all parents’ combined borrowing)

Legacy Provision for Current Students
The OBBBA allows some students to continue borrowing Direct Student Loans without being subject to the new aggregate and lifetime limits under this limited exception through their expected time to complete the degree or a maximum of three academic years, whichever is less.

Students may qualify for the Legacy Provision if they meet the criteria below:

  • Enrolled in your program of study as of June 30, 2026.
  • Have received at least ONE Federal Direct Loan disbursement BEFORE July 1, 2026 for that program.
  • Maintain continuous (uninterrupted) enrollment in the same program of study. NOTE: Legacy protections end if you withdraw or transfer.
Keep your Student record updated

Meet with my academic advisor

  • Make sure you’re going to meet all of your degree requirements.

Keep your student record updated.

What Does Loan Proration Mean?

Students who are enrolled for a minimum of 6 applicable credits towards their Leeward CC degree may be eligible to borrow a student loan. However, students enrolled for 6-11 applicable credits may have their loan offer prorated (adjusted) to match their enrollment level.

Please click on the link for the loan limits (annual, aggregate and lifetime).

Full-Time (12 or more credits) Enrollment Example: Enrolled in 12 applicable credits for the Fall and term and also expect to be enrolled for 12 applicable credits for the Spring term. 

  • At 12 applicable credits each term, you may be eligible to borrow 100% of the maximum determined loan offer – $3500 (first year, first-time student) in the Direct Subsidized Loan for the entire aid year ($1750 in Fall and $1750 in Spring, minus loan fees).
  • At 12 applicable credits each term, you may be eligible to borrow 100% of the maximum determined loan offer – $2000 (first year, first time student) in the Direct Unsubsidized Loan for the entire aid year ($1000 in Fall and $1000 in Spring, minus loan fees)

Part-Time (6-credits) Enrollment Example: Enrolled in 6 applicable credits for the Fall term and also expect to be enrolled for 6 credits in the Spring term. 

  • At 6 applicable credits each term, you may be eligible to borrow 50% of the annual Direct Subsidized Loan Limit of $3500 as a first-time, first-year student. $3500 divided by 2 = $1750, which would be your maximum for the Federal Direct Subsidized Loan. The loan offer would be split into two equal payments – $850 for Fall and $850 for Spring (minus loan fees).
  • At 6 applicable credits each term, you may be eligible to borrow 50% of the annual Direct Unsubsidized Loan Limit of $2000 as a first-time, first-year student. $2000 divided by 2 = $1000, which would be your maximum for the Federal Direct Unsubsidized Loan. The loan offer would be split into two equal payments – $500 for Fall and $500 for Spring (minus loan fees).
How Do I know if I am considered a New or Current borrower?

New Student Loan Borrower:

  • Anyone who did not take out a loan during their current program of study.
  • Check your loan history by logging onto Federal Student Aid.
  • Anyone starting a new program of study beginning with the 2026-2027 school year.

Current Student Loan Borrower:

  • Anyone who received a Federal Direct Loan disbursement for the same program of study before July 1, 2026.
  • Check your loan history by logging onto Federal Student Aid.

*Please visit Federal Student Aid for the most up-to-date information.