One Big Beautiful Bill Act (OBBBA)

• Pell Grant eligibility will be largely unchanged.
• Subsidized loans will remain available to undergraduate students.
• Current undergraduate annual and aggregate loan limits will remain in place.
• Federal Work-Study will be unchanged.
• Public Service Loan Forgiveness (PSLF) will continue, including counting residency and internship time toward forgiveness.

FAFSA Form Changes for the 2026–27 Aid Year. Starting with the 2026–27 FAFSA, certain assets do not need to be reported.

Excluded Items Include

• Current net worth of a family-owned business with fewer than 100 full-time employees.
• Net worth of farms where the family resides.
• Net worth of family-owned and controlled commercial fishing business assets and related expenses.

Effective Tuesday, July 1, 2026, Pell Grant changes include:

• The foreign earned income exclusion will be added to the adjusted gross income when calculating Pell eligibility.
• Students receiving nonfederal scholarships or grants covering the full Cost of Attendance will be ineligible to receive Pell funding.
• Students with a Student Aid Index (SAI) equal to or greater than twice the maximum Pell award for the year will be ineligible for Pell funding (limited exceptions apply).

Example: If the maximum Pell amount for 2026–27 is $7,395, and a student has an SAI of 14,790 or greater, the student will not be eligible for a Federal Pell Grant.

Limited Exception: A limited exception applies for dependents of deceased service members and safety officers.

Loan Amounts and Enrollment Status

Loan funding amounts will be prorated for less than full-time enrollment. If you are enrolled less than full-time, you will be eligible for a reduced amount of loan funding. Enrollment status is determined by degree applicable coursework.

Lifetime Borrowing Loan Cap

A $257,500 lifetime borrowing cap will be established on all federal student loans (undergraduate, graduate, and professional), excluding Parent PLUS.

• Beginning July 1, 2026, new Parent PLUS loan borrowers may borrow up to $20,000 per year and $65,000 in total per dependent student.
• Legacy Borrowing Provision (continuing students): Students who were enrolled in a program of study on or before Monday, June 30, 2026, and who received a Direct Loan disbursement for that program before Tuesday, July 1, 2026, are eligible to have a parent borrow under the prior Parent PLUS loan rules for up to three academic years or through the remainder of the student’s expected time to degree completion whichever is shorter.

• The Graduate PLUS program will be discontinued as of Tuesday, July 1, 2026.
• Legacy borrowing provision (continuing students); Students who were enrolled in a program of study as of Monday, June 30, 2026, and had a Graduate Plus Direct Loan disbursed for that program of study prior to Tuesday, July 1, 2026, can continue to borrow under the previous loan limits for three academic years or the remainder of their expected time to degree completion, whichever is less.

Only applicable for graduate and professional students.

Effective Tuesday, July 1, 2026:

• Graduate (Non-Professional): $20,500 annual, $100,000 aggregate.
• Professional Degree: $50,000 annual, $200,000 aggregate.
• Legacy limits will apply for loans before Tuesday, July 1, 2026.

The OBBBA replaces most existing income-driven repayment plans with a new framework.

Income-Driven Repayment Plans Being Eliminated

OBBBA Removes

• Pay As You Earn (PAYE)
• Saving on a Valuable Education (SAVE)
• Income-Contingent Repayment (ICR)

If You Borrowed Before Tuesday, July 1, 2026

Your options are not changing right away. You can continue using the following plans:

• 10-year Standard Repayment Plan
• 10-year Graduated Repayment Plan
• 25-year Extended Repayment Plan

If You are Currently on These Income-Driven Plans:

• Pay As You Earn (PAYE)
• Income Contingent Repayment (ICR)
• Income Based Repayment (IBR)

You can remain on these plans until 2028.

IMPORTANT: Borrowers must switch to a new eligible plan by July 1, 2028.

If you borrow on or after Tuesday, July 1, 2026

You will have two repayment plans to choose from:

1. Standard Repayment Plan
   • Fixed monthly payments.
   • Repayment period of 10–25 years, depending on loan balance.
2. Repayment Assistance Plan (RAP)
   • Income-driven payments will be set at 1 percent to 10 percent of adjusted gross income.
   • $10 minimum monthly payment if income is under $10,000 per year.
   • Remaining balance may be forgiven after 30 years.

Will the New Law Immediately Affect My Existing Loans or Aid?

No. If you are currently receiving aid or are in repayment, your loans and grants remain under their present terms for now. Most changes apply starting on July 1, 2026. Montclair State University is monitoring federal guidance and will update this page as details are finalized.

I Am Already Enrolled at Montclair State University. Will These Changes Affect Me Mid-Program?

If you are currently enrolled and participating in student and or parent loan programs at Montclair State University, there are no changes to the aid you have already received.

If you or your parent borrowed a student loan for a term that begins before Tuesday, July 1, 2026, you may be eligible to borrow under the previous loan limits. If you are a graduate student, you may borrow additional Graduate PLUS Loans under the previous loan limits to finish your current program of study or for three years, whichever is shorter.

To be eligible for previous loan limits, including Graduate PLUS, you must be continuously enrolled in your current program of study. If you take a leave of absence or go on academic pause, you will be considered a new borrower subject to the new loan limits. You will also be considered a new borrower if you temporarily stop attending your current program of study to enroll in and or complete another program.

What if I Plan To Borrow Federal Loans and I Will Not Be Enrolled Full-Time?

Starting in 2026–27, annual loan amounts will be prorated based on enrollment status. Further guidance from the Department of Education is expected.

What Happens if I Have Already Reached My Aggregate Federal Direct Loan Limits Under the Old Rules?

If you have borrowed up to the aggregate federal loan limits under current rules, you may not be eligible for additional Federal Direct Loans unless the new law raises the limits for your situation. Further guidance is still pending. Montclair State University will provide updates after new rules are finalized.

Is Public Service Loan Forgiveness (PSLF) Still Available?

Yes. PSLF remains in place and eligible borrowers can continue to work toward forgiveness. Further details on how PSLF will interact with the new repayment framework are subject to pending rulemaking.

On Friday, October 31, 2025, the U.S. Department of Education published new regulations changing the definition of a qualifying employer. Effective Tuesday, July 1, 2026, entities that the Department determines engage in illegal activities such that the organization has a substantial illegal purpose will no longer be qualifying employers for PSLF. Examples cited include aiding and abetting violations of federal immigration laws, supporting terrorism, and aiding and abetting illegal discrimination. The Department will notify borrowers if it determines an employer no longer qualifies.

How Much Can Undergraduates Borrow Under the New Law?

Across all colleges and universities, the law does not change annual or aggregate loan limits for undergraduate students. Annual loan limits remain $5,500 to $12,500 based on year in school and dependency status. Aggregate loan limits remain $31,000 to $57,500 based on dependency status. Undergraduate loans will now count toward the new lifetime limit of $257,500 for federal student borrowing across undergraduate, graduate, and professional study, without regard to any amounts repaid, forgiven, canceled, or otherwise discharged.

Will parents still be able to borrow Parent PLUS Loans?

Yes, but starting in 2026–27, limits apply; $20,000 per year and $65,000 lifetime per student. If you already have Parent PLUS Loans, you may be eligible for grandfathering under prior rules. Federal guidance is pending.

Will these changes affect my Work-Study?

No. Work-Study eligibility continues to be based on financial need as determined by the FAFSA and institutional packaging policies.

What Is Happening With Graduate PLUS Loans?

Graduate PLUS Loans are being phased out. New graduate and professional students will no longer be eligible to borrow Graduate PLUS for terms that begin on or after Tuesday, July 1, 2026. If you are already borrowing before that date, you may be allowed to continue under grandfathering rules. More guidance is expected.

Is My Program a Professional Program or Graduate Program?

The distinction is defined in federal regulation (34 CFR § 668.2) and affects borrowing limits.

Professional programs typically lead directly to licensure in a recognized profession and are generally doctoral level, including:

• 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.)
• Clinical Psychology (Psy.D. or Ph.D.)

Clinical Psychology (Ph.D) is offered at Montclair State University. All other post-baccalaureate programs, including most master’s and PhD programs, are classified as graduate.

If the Graduate PLUS Loan Is Going Away, What Alternative Funding Options Should I Consider?

• Graduate Assistantships.
• Private loans.
• Employer-sponsored education benefits or public service programs.
• Monthly tuition payment plans through the Office of Student Accounts.
• External scholarships or fellowships.

If you expect to need more funding than the new federal loan limits allow, contact Red Hawk Central to discuss options that may fit your program and timeline.

Are Provisionally or Conditionally Accepted Graduate Students Eligible for Legacy Borrowing Provisions?

No. Students enrolled in preparatory coursework do not qualify for legacy borrowing provisions and would be treated as new borrowers.