In 2025, the Federal government passed legislation that makes significant changes to Federal Student Aid eligibility. Many of those changes begin going into effect on July 1, 2026, and many have the potential to affect students pursuing undergraduate and graduate degrees and certificates.
Changes are wide-ranging and include new loan limits for part-time students, new borrowing limits for select types of loans, the elimination of Graduate PLUS loans, and a reduction in repayment plan options, among other updates.
Some details of the legislation—commonly referred to as One Big Beautiful Bill Act (OBBBA or OB3) and/or the Big Beautiful Bill and/or the Working Families Tax Cut—are still being finalized at the Federal level. In the meantime, University of Maryland Global Campus (UMGC) is closely monitoring guidance from the U.S. Department of Education and is committed to sharing clear and timely updates.
Given the rollout of new rules around some types of Federal financial aid, we chatted with three UMGC financial aid experts to get more information about these changes and how they may impact UMGC students’ educational goals.
Dareth Wallace is assistant vice president of Compliance, Fraud Prevention, and Training in UMGC’s Office of Financial Aid. She has more than 16 years of experience helping students navigate financial aid. She has held a variety of roles including leading student finance operational teams, implementing new systems, and establishing compliance and quality assurance practices.
Jay Tinsley is assistant vice president of Financial Aid Counseling in UMGC’s Office of Financial Aid. He has more than 20 years of experience working in financial aid roles ranging from financial aid counselor to regulatory specialist. His team supports the day-to-day administration of Federal Student Aid at UMGC and is the primary student-facing unit for the department.
Jeremy Brannan is associate vice president of UMGC’s Office of Financial Solutions. He has worked in higher education, specializing in student finance and affordability, for 19 years. He has built and led teams with specialized expertise in federal student aid, student finance counseling, academic advising, training, quality assurance, financial aid fraud prevention, and communications.
Please note that the questions and answers below are intended to be illustrative and are not financial advice. Changes to financial aid rules will affect each person differently depending on a variety of factors. Students should consult with UMGC’s Office of Financial Solutions or a personal financial advisor as needed to make decisions about their finances as they relate to their education.
Q: What new laws affect Federal financial aid for students?
Wallace: The One Big Beautiful Bill Act brings significant changes to the Federal student aid programs. The bill aims to limit how much students and parents can borrow, thereby reducing long-term debt, simplifying loan repayment options, and encouraging students to complete degree programs through continuous enrollment. It introduces several new items, including but not limited to
- New aggregate loan limits for graduate students and Parent PLUS loans
- A new lifetime borrowing limit for student borrowers
- The elimination of Graduate PLUS loans for new borrowers
- Loan adjustments for less-than-full-time academic year enrollment
Q: How do recent changes alter financial aid amounts?
Tinsley: The most significant change for most students is to annual loan amounts. Starting with the summer 2026 semester, if you are attending less-than-full-time, your annual loan eligibility will be reduced. Simply put, taking fewer classes than full-time enrollment will mean less loan aid. This is a significant change to what a continuing student is used to, especially if you are enrolled part-time. At UMGC, many students may not be attending full-time, so they need to be aware of the new loan limits.
Q: How have Federal loan limits changed this year?
Wallace: While annual loan limits for undergraduate and graduate students are unchanged from previous years, there were several changes to aggregate loan limits:
- New graduate student borrowers have a new aggregate limit, which means they can only borrow $100,000 maximum for graduate school (excluding undergraduate borrowing)
- Parent PLUS borrowers now have an annual limit of $20,000 per dependent student and an aggregate limit of $65,000 per dependent student
- Students now have a new maximum lifetime aggregate limit, which means they can only borrow $257,500 maximum in their lifetime, which includes undergraduate, graduate, Graduate PLUS borrowing history, and professional programs
If someone is a legacy borrower (you received a federal loan before the new loan limits start on July 1), you may temporarily qualify for an exception to continue borrowing under the previous aggregate loan limits. However, if you lose that exception, your past loans and future borrowing will be reviewed using the new federal loan aggregate limits.
Enrollment interruptions (such as withdrawing, stopping attendance, graduating from or changing programs) as well as meeting the time-limit for the exception may result in losing the legacy borrower qualification.
If you have questions, your success coach can help you understand your options and choose what’s best for your education goals.
How are these changes impacting student aid disbursement?
Tinsley: Across the country, colleges and universities, including UMGC, have been working through federal system changes that require updates from software vendors before aid can be fully processed. As these updates are implemented, there are technical issues that must be resolved, and manual intervention is needed to ensure students receive the correct aid. This has resulted in delays.
We understand that uncertainty and delays are frustrating, especially when they involve financial aid which helps you reach your education goals. We hear those concerns and are working diligently to move disbursements forward as efficiently as possible.
As we navigate these changes, being transparent with our learners is a top priority. We are committed to keeping you informed and will continue to share updates as soon as they become available.
Q: How has Pell Grant eligibility changed for online students?
Brannan: Pell Grant eligibility continues to be based on Federal rules, FAFSA information, enrollment, and program eligibility. The changes are not specific to online students, but students should be aware that Pell eligibility may be impacted by Federal updates and their individual circumstances.
Q: What are the most challenging aspects of these changes for working adult and military-affiliated students, and how can they best be addressed?
Brannan: The most challenging aspect is uncertainty. Many working adult and military-affiliated students are balancing education with employment, family, military service, and other financial responsibilities, so changes to aid eligibility or timing can create stress. The best approach is for students to plan early, complete the FAFSA, review their aid information, ask questions, and connect with UMGC support teams before making enrollment or payment decisions.
Tinsley: We also recommend students only borrow what is needed and consider other funding options. Research scholarships and grant opportunities as well as resources available through employment or professional affiliations.
Q: How are options for loan repayment impacted by this bill?
Wallace: Federal student loan repayment options will be simplified but more limited. Borrowers with loans disbursed on or after July 1, 2026 will have two repayment plan options: the Repayment Assistance Plan (RAP) or the Tiered Standard Plan. For borrowers with loans disbursed before July 1, 2026, you may be able to access your current plan depending on your future borrowing plans. If enrolled in the Pay As You Earn (PAYE) repayment plan or Income-Contingent Repayment (ICR) plans, you will need to enroll in another repayment plan by July 1, 2028. These are complex changes-we want you to be prepared. We encourage students to reach out to the company that services their loan early to discuss options and select the right repayment plan for them. Students can utilize the loan simulator from Federal Student Aid, which can help them estimate monthly student loan payments and choose the best loan repayment option for their financial situation.
Q: Where can students find official updates on Federal financial aid?
Tinsley: Students have several resources to keep up to date on OB3 changes:
- UMGC’s One Big Beautiful Bill webpage
- The U.S. Department of Education’s website
- One Big Beautiful Bill Act Updates
- One Big Beautiful Bill Act - Important Definitions
Q: How does UMGC help students navigate Federal financial aid changes?
Brannan: UMGC provides support through the Office of Financial Solutions. Students can review information online, monitor their MyUMGC portal, and contact the Office of Financial Solutions for help understanding their options and next steps. Our financial solutions advisors are available to walk you through all the details you need.
Reference on this webpage to any third-party entity or product does not constitute or imply endorsement by UMGC nor does it constitute or imply endorsement of UMGC by the third party.
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