One Big Beautiful Bill Changes

Loan Reduction Due to Less than Full-time Enrollment

• Institutions are required to reduce annual loan amounts in direct proportion to the percent of full-time status the student is enrolled.
• If a student drops a course or withdraws a course at any point within the semester and they go below full-time, we will be required to reduce their loans.
• This will be effective for the 2026-2027 aid year for ALL students.

Undergraduate Student Example

• Student is full-time for Fall semester (12 credits) - 12/24 = 50%
• Loan is disbursed at full-time (12 credits) (50%) - $2,750 of a $5,500 loan
• Student withdraws from one class (3 credits) but keeps the 50% Fall disbursement
• Student enrolls full-time for Spring. 12 credits (50%) BUT
• Since their total enrollment is now 21 credits (9+12 = 21 / 24 or 87.5%)…
• They can only receive 87.5% of the total annual loan amount… $5,500 x 87.5% = $4,813
• And the Fall amount must be subtracted before the Spring amount can be released
• So, the Spring amount would be 37.5% of the annual amount ($4,813 – $2,750 or $2,063)

Parent PLUS Loan Limits

Legacy: Parents who previously borrowed for their dependent student prior to July 1, 2026, can borrow Parent PLUS loans for the student for up to 3 years or their student's expected time to credential with no limits other than Cost of Attendance. Students must maintain concurrent enrollment. If they withdraw from a semester or don't attend a semester, they are no longer a legacy student. Expected time to credential is based on full-time enrollment. If a student is going to school part-time, they could lose legacy status due to this. 

• Annual limit: $20,000 per year, per student.
• Lifetime limit: $65,000 aggregate per dependent student.

 What "Expected Time to Credential" Means 

Under the One Big Beautiful Bill Act (OBBBA), expected time to credential is used to determine how long certain students can remain eligible for “legacy” federal loan rules for Parent PLUS loans after those regulations are enforced beginning on July 1, 2026.

Expected time to credential is how much time a student should reasonably need to finish their current program, assuming full‑time enrollment, based on the program’s published length—minus the time they’ve already completed. The expected time to credential for a Bachelor’s Degree program is 4 years, attending full-time (12 credits or more) each semester.

Transferring and Change of Major/Programs

Students transferring from one institution to another or from an Associate Degree program to a Bachelor's Degree program will not be considered a legacy student. Undergraduate students will lose the Parent PLUS Loan legacy provision when this occurs and will be subject to the new annual and lifetime loan limits. This means if a parents has previously borrowed the annual or lifetime PLUS loan limits, they will not be able to borrow any more for that year or for that student's remaining time of enrollment. 

Students cannot opt out of the legacy provisions. If they follow the guidelines, they will continue to be legacy students under the old rules for the next 3 years beginning Fall 2026.

Pell Grant Changes

The One Big Beautiful Bill Act has tightened the regulations on who can receive the Federal Pell Grant. Below are those changes.

1. Higher Income Threshold (SAI Limit): Students whose Student Aid Index (SAI) is equal to or greater than twice the maximum Pell award (about $14,790 for 2026–27) will not be eligible — even if their income is lower. FSA Partner Connect
2. Students with Full Scholarships: If a student has enough non-federal scholarships and grants (like a full-ride scholarship) to cover their entire cost of attendance, they cannot also get a Pell Grant. NAICU
3. Foreign Income Counts for Eligibility: If a family has foreign earned income, it must now be included in calculating eligibility — which can raise the SAI and reduce or eliminate Pell eligibility. FSA Partner Connect

Together, these changes mean some students who previously qualified could lose Pell Grant eligibility.

Lifetime Limit (all loans): $257,500

• Excluding Parent PLUS loans where student received funds for parent's loan application.
• Includes undergraduate, graduate, Grad PLUS Loans, and Parent PLUS loans where the individual is the one who borrowed.

• Legacy: If a borrower has a Federal Direct or Grad PLUS loan disbursed prior to July 1, 2026, they can continue to receive loan disbursements for up to 3 years, or the student's expected time to credential, as long as they maintain concurrent enrollment. If they withdraw from a semester or don’t attend a semester, they are no longer a legacy student.

Graduate Loan Limit:

• Lifetime:
  • $100,000 for new graduate students beginning Fall 2026.
  • $200,000 for 'professional' students: Law schools and med schools only.
    • St. Cloud State University does not offer professional degree programs.
  • Does not include loans borrowed as an undergraduate student.
  • Legacy Students - their lifetime loan limit is still $138,500 and includes undergraduate and graduate loans.
• Annual:
  • $20,500 for most graduate students (unchanged).
  • $50,000 for 'professional' students: Law schools and med schools only.
    • St. Cloud State University does not offer professional degree programs.

Grad PLUS Loans:

This program has been eliminated as of July 1, 2026. If you are a new graduate student for the 2026-2027 school year, or have graduated and are starting a new graduate program, the Grad PLUS Loan will no longer be available to you.

• Legacy: If a borrower has a Federal Direct (Unsub or PLUS) loan disbursed prior to July 1, 2026, they can continue to receive loan disbursements for up to 3 years or the student's expected time to credential as long as they maintain concurrent enrollment. If they withdraw from a semester or don't attend a semester, they are no longer a legacy student

What “Expected Time to Credential” Means Under OBBBA

Under the One Big Beautiful Bill Act (OBBBA), expected time to credential is used to determine how long certain students can remain eligible for “legacy” federal loan rules, especially PLUS loan and higher unsubsidized loan limits, after those programs are largely eliminated on July 1, 2026.

Expected time to credential is how much time a student should reasonably need to finish their current program, assuming full‑time enrollment, based on the program’s published length—minus the time they’ve already completed. The expected time to credential for graduate students vary based on the certificate or degree program they are enrolled in.  

Transferring and Change of Major/Programs

Students must maintain concurrent enrollment in their current program, started prior to July 1, 2026. If a student changes their program of study, that is not concurrent enrollment, and they lose their legacy status. If a student graduates and then starts a new program within the next 3 years, that is not concurrent enrollment, and they lose their legacy status.

Students cannot opt out of the legacy provisions. If they follow the guidelines, they will continue to be legacy students under the old rules for the next 3 years beginning Fall 2026.

Loan Reduction Due to Less than Full-time Enrollment

• Institutions are required to reduce annual loan amounts in direct proportion to the percent of full-time status the student is enrolled.
• If a student drops a course or withdraws from a course at any point within the semester and they go below full-time, we will be required to reduce their loans in a subsequent term.
• This will be effective for the 2026-2027 aid year for ALL students.

Graduate Student Example:

• Student is full-time for Fall semester (6 credits) – 6/12 = 50%
• Loan is disbursed at full-time (6 credits) (50%) - $10,250 of a $20,500 loan
• Student withdraws one class (3 credits) but keeps the 50% Fall disbursement
• Student enrolls full-time for Spring. 6 credits (50%) BUT
• Since their total enrollment is now 9 credits (3+6 = 9/12 or 75%)…
• They can only receive 75% of the total annual loan amount… $20,500 x 75% = $15,375
• And the Fall amount must be subtracted before the Spring amount can be released
• So the Spring amount would be 25% of the annual amount ($20,500 – $10,250 or $5,125)
• Grad PLUS loans also need to be prorated.