One Big Beautiful Bill Act (OBBBA): What Dallas College Students Should Know

Last updated: April 16, 2026

The One Big Beautiful Bill Act (OBBBA) was signed into law on July 4, 2025, resulting in significant changes to federal student aid and student loans. Some provisions took effect immediately, but most student-facing changes begin July 1, 2026, with a smaller set of changes beginning July 1, 2027. Dallas College continues to monitor federal guidance and will provide updates as the U.S. Department of Education (ED) releases additional implementation details. 

Do I need to do anything right now?

No. New and continuing students should continue to submit the FAFSA and complete any Dallas College financial aid requirements as usual. Most OBBBA changes begin July 1, 2026, and we will share updated instructions as ED finalizes operational guidance.

What is staying the same (for most Dallas College students)?

• Undergraduate Direct Loan limits are not changing. Annual and aggregate loan limits remain the same as today.
• The undergraduate in-school interest subsidy remains. Earlier proposals to eliminate it were not included.
• Federal Work-Study: No major statutory changes were included in OBBBA, and eligibility continues to be based on financial need and institutional packaging.

What is changing starting July 1, 2026?

Pell Grant updates

Beginning July 1, 2026, OBBBA adds two new Pell eligibility limits:

• Full cost-of-attendance scholarship restriction: Students whose scholarships meet or exceed their full Cost of Attendance (COA) may be ineligible for Pell for the term(s) in which they receive full-ride funding. Important note: The ED is still finalizing the exact process for implementing the “full COA scholarship” restriction in institutional awarding and disbursement systems.
• High SAI restriction: Students with a Student Aid Index (SAI) of at least two times the maximum Pell Grant may be ineligible for Pell. Using FY25 as an example, when the Pell maximum is $7,395, the threshold is $14,790.
• Also new: The bill funds Pell program shortfalls and creates a Workforce Pell pathway for certain accredited short-term certificate programs.

Federal student loan updates

• Annual loan proration on part-time enrollment. Starting in 2026–27 and beyond, annual loan limits will be reduced in proportion to enrollment below full-time.

Example of Loan Eligibility at 6 Credit Hours (Starting July 1, 2026)

• New lifetime federal student borrowing limit. OBBBA establishes a $257,500 total lifetime borrowing limit across federal student loans (undergraduate, graduate, and professional combined).
• Major changes for graduate borrowers. These are relevant for bachelors-to-graduate pathways. Starting July 1, 2026:
  • Grad PLUS loans are eliminated for new borrowing
  • New Direct Unsubsidized limits apply:
    • Graduate (non-professional): $20,500 annual / $100,000 aggregate
    • Professional programs: $50,000 annual / $200,000 aggregate
• New annual and lifetime caps for Parent PLUS loans. Starting July 1, 2026, parents will be limited to:
  • $20,000 per year per student, and
  • $65,000 lifetime per student (across all parents combined)
    • This represents a significant change from current rules, where Parent PLUS loans may cover up to the full cost of attendance (COA).

• Repayment plan changes. OBBBA restructures income-driven repayment and introduces the Repayment Assistance Plan (RAP), which is expected to be available no later than July 1, 2026. Many institutions and analysts describe the post-2026 repayment landscape as centered on:
  • A revised standard repayment plan, and
  • RAP, with payments generally based on 1% to 10% of adjusted gross income (AGI) and potential forgiveness after 30 years.

Public Service Loan Forgiveness (PSLF) updates

• RAP payments and PSLF. OBBBA updates PSLF so that payments made under RAP can count toward PSLF credit, assuming all other PSLF requirements are met.
• Qualifying employer definition changes (effective July 1, 2026). The ED issued a final rule (October 30, 2025) updating the PSLF “qualifying employer” definition to exclude organizations determined to have a substantial illegal purpose. The rule takes effect July 1, 2026, and ED indicates borrowers will be notified if an employer is determined not to qualify. 

What is changing starting July 1, 2027 (important for future borrowers)

OBBBA also changes certain deferment and forbearance options for future borrowers, including:

• Eliminating some deferment options (such as unemployment or economic hardship deferment) for borrowers taking loans after July 1, 2027
• Shortening some forbearance durations

Frequently Asked Questions

• Will this immediately affect my current loans or aid?
  Not immediately for most provisions. Key changes largely begin July 1, 2026 (with some beginning July 1, 2027).
• I’m enrolled now—will anything change mid-program?
  If your aid is already awarded for the 2025–26 year, it continues under current rules. Changes described above primarily apply beginning in the 2026–27 academic year.
• I’m less than full-time—what does this mean for loans?
  Starting in 2026–27, your annual federal loan eligibility will be reduced in proportion to how far below full-time you are, based on an ED-issued reduction schedule.
• I’m a parent borrower—what’s the biggest change?
  Starting July 1, 2026, Parent PLUS borrowing is capped at $20,000 per year and $65,000 lifetime per student (across all parents).

Key timeline reminders

• 2025–26 Aid Year: Aid continues under current rules
• July 1, 2026: Most changes begin (Pell eligibility limits, Parent PLUS caps, graduate lending changes, part-time loan proration implementation, repayment framework rollout, PSLF employer rule effective)
• July 1, 2027: Certain deferment and forbearance changes apply for future borrowers

Need help?

If you have questions about how these changes could affect your situation, contact Dallas College Financial Aid at: financialaid@dallascollege.edu or (972) 669-6400.