Federal Financial Aid Changes

You are enrolled in an undergraduate program during the 2025-2026 academic year and will continue in 2026-2027

What’s Staying the Same

Undergraduate Loan Limits

No Change: Subsidized and Unsubsidized loan limits remain the same

• Annual: $5,500-$12,500 (based on year and dependency status)
• Total: $31,000 (dependent) or $57,500 (independent)
• U.S. Department of Education: Loan Amount Limits

What’s Changing

Parent PLUS Loan Limits

New limits: Updated annual and lifetime borrowing limits apply to Parent PLUS loans – limits are per student, not per parent borrower

• Annual: $20,000 per year, per student
• Total: $65,000 per student

Action: If you do not qualify for an exception and your parent(s) plan to borrow in excess of new limits, consider private education loan options

Reduced Annual Loan Limits for Part-Time Enrollment

Limited loan eligibility: If you enroll in fewer than12 credits for a semester, the amount you can borrow for the semester may be reduced

Example: If you enroll in 6 credits for the Fall semester (half of full-time), the portion of your annual loan limit attributable to the Fall will be reduced proportionally (also by half). If the amount you plan to borrow for the Fall exceeds the new limit, your Fall loan must be reduced to the new limit.

Example: If you enroll in 12 credits for the Fall semester and, at any point in the term, drop below full time (less than 12 credit hours), your Spring loan may be reduced.

Action: If you plan to enroll part-time and your federal loans are reduced leaving a funding gap, consider private education loan options. Please make sure to consult with Student Financial Aid before dropping any courses.

Pell Grant Eligibility

Updated eligibility criteria: Certain types of income/assets are either included or excluded for some students, and new eligibility limitations apply

• Certain Assets Excluded: Family businesses (≤100 employees), family farms, and commercial fishing operation assets will be excluded
• Foreign Income Included: Income from foreign sources will be added to adjusted gross income (AGI)
• Student Aid Index (SAI) limitation: Students with SAI ≥ $14,790 (2x the current maximum Pell award) will not be eligible
• Other grants and scholarships limitation: Students with total grants and scholarships from non-federal sources ≥ total estimated cost of attendance will not be eligible for Pell

Action: None required

Exception for Current Students (a.k.a. “legacy” or “grandfather” provisions)

Most current students qualify for an exception: If you qualify, new Parent PLUS limits don’t apply for up to three academic years

Your parent(s) may continue borrowing Parent PLUS loans under prior limits for up to 3 academic years (or the remainder of your academic program, whichever is less) if –

• you are enrolled as of June 30, 2026, and
• you or your parent(s) previously borrowed a federal loan for your academic program, and
• you remain in the same academic program through graduation

Key Detail: The OBBB does not provide exceptions for reduced annual loan limits for part-time enrollment or updated Pell Grant eligibility provisions. Both are effective July 1, 2026 for the 2026-27 academic year.

You are starting an undergraduate program at Converse in the Fall of 2026 or later

Pell Grants

The maximum Federal Pell Grant remains $7,395 for the 2026-27 academic year

Updated Eligibility Criteria

• Certain Assets Excluded: Family businesses (≤100 employees), family farms, and commercial fishing operation assets will be excluded
• Foreign Income Included: Income from foreign sources will be added to adjusted gross income (AGI)
• Student Aid Index (SAI) limitation: Students with SAI ≥ $14,790 will not be eligible for Pell
• Other grants and scholarships limitation: Students with total grants and scholarships from non-federal sources ≥ total estimated cost of attendance will not be eligible for Pell

Federal Student Loans:

No Change: Subsidized and Unsubsidized loan limits remain the same

Undergraduate Loan Limits

• Annual: $5,500-$12,500 (based on year and dependency status)
• Total: $31,000 (dependent) or $57,500 (independent)
• U.S. Department of Education: Loan Amount Limits

Parent PLUS Loan Limits

New limits: Updated annual and lifetime borrowing limits apply to Parent PLUS loans – limits are per student, not per parent borrower

• Annual limit: $20,000 per year per student
• Lifetime limit: $65,000 total per student

Key Detail: Unless Congress subsequently changes the lifetime Parent PLUS limit, families borrowing $20,000 in each of a student’s first three academic years will only be able to borrow $5,000 in the student’s 4th year.

Recommendation: If your parents plan to borrow in excess of new Parent PLUS limits, consider private education loan options

Reduced Annual Loan Limits for Part-Time Enrollment

Limited loan eligibility: If you enroll in less-than 12 credits for a semester, the amount you can borrow for the semester may be reduced

Example: If you enroll in 6 credits for the Fall semester (half of full time), the portion of your annual loan limit attributable to the Fall will be reduced proportionally (also by half). If the amount you plan to borrow for the Fall exceeds the new limit, your Fall loan must be reduced to the new limit.

Recommendation: If you plan to enroll part-time or drop below full-time, please contact the Student Financial Aid Office for guidance on how this will affect your current and future financial aid.

You are enrolled in a graduate or professional program for the 2025-2026 academic year and will continue in 2026-27

What’s Changing

• New Annual, Aggregate, and Lifetime Total Loan Limits
• Critical Change: Graduate PLUS loans are no longer available starting July 1, 2026 (most current students qualify for an exception)

Action: If you do not qualify for an exception and your program costs exceed new limits, consider private education loan options.

Full Time Graduate Enrollment Required for Loan Eligibility

You must be enrolled in six (6) graduate credit hours each semester to qualify for a federal direct loan. If you enroll less-than full-time (6 credits per semester- Fall, Spring, or Summer), you are not eligible for a Federal Direct Loan.

Action: If you plan to enroll part-time and your federal loans are reduced leaving a funding gap, consider private education loan options

Exception for Current Students (a.k.a. “legacy” or “grandfather” provisions)

Most current students qualify for an exception: If you qualify, you can borrow Graduate PLUS loans under prior limits for up to 3 academic years

You may continue borrowing Graduate PLUS loans under prior limits for up to 3 academic years (or the remainder of your academic program, whichever is less) if –

• you are enrolled as of June 30, 2026, and
• you previously borrowed a federal loan for your academic program, and
• you remain in the same academic program through graduation.

You are starting a graduate or professional program in the Fall of 2026 or later

Federal Student Loans

• New Annual, Aggregate, and Lifetime Total Loan Limits
• Critical Change: Graduate PLUS loans are no longer available starting July 1, 2026

Full Time Graduate Enrollment Required for Loan Eligibility

You must be enrolled in six (6) graduate credit hours each semester to qualify for a federal direct loan. If you enroll less-than full-time (6 credits per semester- Fall, Spring, or Summer), you are not eligible for a Federal Direct Loan.

Action: If you plan to enroll part-time and your federal loans are reduced leaving a funding gap, consider private education loan options.

You are currently in school and haven’t started repaying your loans yet

New and Updated Repayment Plans

Simplified Repayment Plan Options: After graduation (or otherwise ceasing enrollment), you’ll choose one repayment plan option for all your federal student loans

Standard Repayment Plan

• Fixed payments over 10-25 years (based on debt amount)
• Pays off loans fastest, lowest total interest

Repayment Assistance Plan (RAP)

• Income-based payments (minimum $10/month)
• Forgiveness after 30 years (360 payments)
• Good for variable income or public service careers

Income-Based Repayment (IBR)

• Only available if you borrowed prior to July 1, 2026 and do not borrow after July 1, 2026
• Payments capped at 10% of discretionary income
• Forgiveness after 20 years

Public Service Loan Forgiveness (PSLF)

PSLF continues: Current PSLF requirements continue until further notice

• Full-time work for qualifying employer (government/eligible nonprofit)
• payments made under a qualifying repayment plan
• 120 qualifying payments

Coming Soon: The U.S. Department of Education will clarify which new repayment plans qualify for PSLF, tentatively in the Summer of 2026

You’re currently repaying your student loans or are in deferment/forbearance

Transition To New Repayment Plans

Your existing federal loan terms are not changing: However, available repayment plan options are

You will receive more information about transitioning to an available repayment plan directly from your loan servicer.

If you are currently in a SAVE or PAYE repayment plan:

Critical change: Current SAVE and PAYE repayment plans are being eliminated

• Interest began accruing on August 1, 2025
• No payment requirement, but interest is accumulating

Recommendation: To avoid interest accumulation, contact your student loan servicer to select an available repayment plan as soon as possible.

Available Options after July 1, 2026

Standard Repayment Plan

• Fixed payments over 10-25 years (based on debt amount)
• Pays off loans fastest, lowest total interest

Repayment Assistance Plan (RAP)

• Income-based payments (minimum $10/month)
• Forgiveness after 30 years (360 payments)
• Good for variable income or public service careers

Income-Based Repayment (IBR)

• Only available if you borrowed prior to July 1, 2026 and do not borrow after July 1, 2026
• Payments capped at 10% of discretionary income

Forgiveness after 20 years

Parent PLUS Borrowers

Alert: New Parent PLUS loans taken after July 1, 2026 are limited to $20,000/year and $65,000 lifetime limits per child

For some families, an older child who is currently in college may qualify for an exception (prior loan limits apply), while new loan limits apply to a younger sibling in the same academic year.

For Parent PLUS loans taken prior to July 1, 2026:

• Parent Borrowers must use the Standard Repayment Plan (no penalty for early repayment)
• May not use RAP
• May consolidate to access ICR, but must transition out of ICR by June 30, 2028

Public Service Loan Forgiveness (PSLF)

PSLF continues: Current PSLF requirements continue until further notice

Requirements:

• Full-time work for qualifying employer (government/eligible nonprofit)
• Payments made under a qualifying repayment plan
• 120 qualifying payments

Transition details:

• Payments made on SAVE/PAYE/ICR should count toward PSLF
• Must select a new qualifying plan by deadlines
• RAP and amended IBR expected to qualify (awaiting confirmation)

Recommendations:

• Continue making qualifying payments
• Submit Employment Certification Forms annually
• Monitor guidance on qualifying plans
• Plan transition before deadlines

Coming Soon:Department of Education will clarify which new plans qualify for PSLF and how payment counts transfer, tentatively in the Summer of 2026

Updated Tax Benefits

Employer-Provided Educational Assistance (Section 127):Up to $5,250 annually tax-free, increasing with inflation starting in 2026

• Can be used for student loan repayment or tuition
• Check if your employer offers this benefit

Other notable tax changes:

• Student loan interest deduction: Up to $2,500 (income limits apply)
• Loan discharge on death/disability: Not taxable income (made permanent)

Borrower Defense and Closed School Discharge

Biden-era regulations delayed and modified: Claims may be reviewed under different standards with potentially longer processing times

Coming Soon: Department of Education will issue new regulations governing borrower defense claims and closed school discharges, tentatively in the Summer of 2026

Coming Soon: Department of Education will provide detailed guidance on plan transitions, payment count transfers, and RAP payment calculations, tentatively in the Summer of 2026