Student Financial Aid

Student Financial Aid
Western Michigan University
Kalamazoo MI 49008-5337 USA
(269) 387-6000

One Big Beautiful Bill Act

The future of federal student aid

On July 4, 2025, President Donald Trump signed major federal legislation the One Big Beautiful Bill Act (OBBB) and the Third Budget Reconciliation Bill (OB3). These changes will impact federal financial aid eligibility and Direct Loan programs beginning July 1, 2026. 

WMU is committed to providing guidance and resources to assist you in making a financial plan to cover your educational costs.

Undergraduate student changes:

Parent PLUS Loan:

  • Annual borrowing limit to $20,000 a year per student.
  • Lifetime aggregate limit will be $65,000 per student.
  • Direct student loan offers will be prorated for students enrolled less than full-time.

Pell Grant:

  • Students with a Student Aid Index (SAI) equal to or greater than twice the maximum Pell Grant award will no longer be eligible for the Pell Grant during that academic year.
  • Students receiving scholarships or grants that fully cover their total cost of attendance (COA) will lose their Pell Grant eligibility for that academic year.
  • Students must maintain 12 credit hours per semester to remain eligible.
  • The net worth of certain family farms and small businesses will be excluded from the SAI) calculation.
  • Foreign income will be included in the adjusted gross income (AGI) when determining Pell grant eligibility.

Loan changes:

  • Direct student loan offers will be prorated for students who are enrolled less than full-time.

Graduate/Professional student changes:

  • The Graduate PLUS loan will no longer be available to new borrowers starting July 1, 2026.
  • Direct Unsubsidized Loan limits for graduate students: $20,500 annually, $100,000 aggregate
  • Direct Unsubsidized Loan limits for professional students: $50,000 annually, $200,000 aggregate
    • The maximum lifetime aggregate per student borrower will be $257,500.
  • Borrowers with loans for programs already started before June 30, 2026, may continue under prior loan limits for up to three years.

Loan Repayment Changes:

  • New borrowers after July 1, 2026, may choose a fixed-term repayment plan.
    • Limited Repayment Plans:
      • A simplified Repayment Assistance Plan (RAP) will offer a minimum monthly payment of $10.
      • Standard Repayment remains.
  • Borrowers with loans disbursed before June 30, 2026 must select a limited repayment plan by July 1, 2028.
  • Hardship and unemployment deferments will phase out beginning in 2027.

Additional federal policy changes:

  • 529 plan funds may be used for up to $20,000 annually.
  • Asset exemptions reinstated for qualifying farms and fisheries.
  • Excise tax introduced on large private university endowments.
  • Supreme Court ruling allowed the Department of Education Reduction in Force (RIF), cutting approximately 1,400 positions and potentially affecting processing and oversight.

Borrowers who have received a loan for a program that has already started as of June 30, 2026, will be exempt from the above borrowing caps for up to three years as they complete their program.