On July 4, 2025, the One Big Beautiful Bill Act (OBBBA) was signed into law, introducing significant changes to federal financial aid programs. Many of these changes take effect on July 1, 2026, and will impact how students receive federal grants and loans. AAMI is committed to keeping students informed throughout this transition. This page will be updated as guidance from the U.S. Department of Education is released.
What the OBBBA Means for Students
The OBBBA amends several provisions of the Higher Education Act of 1965 and directly affects how federal financial aid is calculated, awarded, and repaid. Some changes went into effect immediately upon signing, while others are scheduled to begin on July 1, 2026. AAMI is actively monitoring federal guidance and will continue to communicate updates to current and prospective students.
Federal Loans
New borrowing limits take effect on July 1, 2026. Graduate PLUS loans are being phased out, and annual and aggregate loan limits have been updated for both undergraduate and graduate students. Students who need funding beyond the new limits are encouraged to contact the Financial Aid Office to discuss alternative options.
Pell Grants
Pell Grant eligibility rules are changing starting with the 2026-27 FAFSA cycle. Certain non-federal scholarships that cover a student’s full cost of attendance may now affect Pell eligibility. Asset exemptions and income calculation rules have also been updated.
Repayment Plans
Most existing income-driven repayment plans will be replaced with a new framework. Borrowers can remain on current plans through July 1, 2028, at which point a transition to an eligible repayment plan will be required. The new Repayment Assistance Plan offers payments between 1% and 10% of adjusted gross income.
Important Notice
The information on this page reflects AAMI’s current understanding of federal financial aid changes under the One Big Beautiful Bill Act and is not intended to serve as legal or financial advice. Many specifics, including transition rules, eligibility criteria, and implementation timelines, remain subject to federal rulemaking and additional guidance from the U.S. Department of Education.
For the most current federal guidance, visit studentaid.gov. Students are encouraged to check this page regularly, as AAMI will update it as new information becomes available.
How These Changes Affect AAMI Students
Students currently receiving federal aid will continue under their existing terms for now. Most changes apply starting July 1, 2026, including updated loan limits, the Graduate PLUS loan phase-out, new FAFSA rules, and revised Pell Grant eligibility requirements. The 2025-26 aid year proceeds under current rules.
Students who expect to need additional funding beyond the new federal loan limits should contact the AAMI Financial Aid Office as early as possible. Planning ahead is the best way to identify alternatives and stay on track financially before July 2026 changes take effect.
Changes Effective July 1, 2026
- New annual and aggregate federal loan limits take effect
- Graduate PLUS loans begin phasing out
- Updated FAFSA rules and revised Pell Grant eligibility criteria apply
- New repayment plan framework becomes available to borrowers
- Income-driven payments set at 1% to 10% of adjusted gross income
What Borrowers Should Know by July 1, 2028
- Current income-driven repayment plans remain available through 2028
- All borrowers must transition to a new eligible repayment plan by July 1, 2028
- The new Repayment Assistance Plan offers fixed or income-based payment options
- Remaining loan balances may be forgiven after 30 years of repayment
- A $10 minimum monthly payment applies for borrowers with annual income under $10,000
Have Questions About Your Financial Aid?
The AAMI Financial Aid Office is available to help students understand how these changes may affect their aid package, loan planning, and enrollment options. Reach out to speak with a financial aid advisor before the 2026 changes go into effect.
Will my current financial aid be affected right away?
No. Students currently receiving aid will continue under their existing terms for now. Most changes go into effect on July 1, 2026. AAMI will notify students directly of any updates that affect their individual aid package.
Are Graduate PLUS loans still available?
Graduate PLUS loans are being phased out beginning July 1, 2026. Students who anticipated relying on Graduate PLUS funding should contact the AAMI Financial Aid Office as soon as possible to explore alternative financing options for their program.
How does the OBBBA affect Pell Grant eligibility?
Pell Grant eligibility rules are being updated starting with the 2026-27 FAFSA cycle. Changes include revised income and asset rules, and certain non-federal scholarships covering a student’s full cost of attendance may now impact Pell eligibility. Students should monitor studentaid.gov and watch for updates from AAMI.
What is the One Big Beautiful Bill Act?
The One Big Beautiful Bill Act (OBBBA) is a federal law signed on July 4, 2025, that introduces broad changes to federal financial aid programs, including loan limits, repayment plans, and Pell Grant eligibility. Many key provisions take effect starting July 1, 2026.
What happens to my income-driven repayment plan?
Most existing income-driven repayment plans will remain in place through July 1, 2028. After that date, all borrowers must move to a new eligible repayment plan. The new Repayment Assistance Plan bases payments on 1% to 10% of adjusted gross income, with a $10 monthly minimum for lower-income borrowers.
Who can I contact with questions about my financial aid?
Students with questions about how the OBBBA affects their specific situation should contact the AAMI Financial Aid Office directly at (212) 757-1190. Additional federal guidance is available at studentaid.gov.