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Northland Community & Technical College

One Big Beautiful Bill Act (H.R. 1)

Financial Aid

On July 4, 2025, President Trump signed H.R. 1, the One Big Beautiful Bill Act, into law. This legislation introduces several changes to federal student aid programs.

At this time, we are awaiting additional guidance from the U.S. Department of Education to fully understand the scope, impact, and implementation of these changes. This page will be updated as new information becomes available and as official federal guidance is released.

Financial Aid Changes Effective July 1, 2026

The provisions outlined below will take effect beginning with the 2026–2027 academic year (July 1, 2026) and will apply to all students unless otherwise indicated.

Loan Adjustments for Less-Than-Full-Time Enrollment

Institutions will be required to prorate annual federal student loan eligibility based on a student’s enrollment status relative to full-time.

  • Annual loan limits must be reduced in proportion to the percentage of full-time enrollment.
  • If a student drops or withdraws from courses during a semester and falls below full-time status, their loan eligibility must be adjusted accordingly.
  • This requirement applies to all students beginning in the 2026–2027 aid year.

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 Borrowers

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 attending school part-time, they could lose legacy status as a result. 

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

Definition: Expected Time to Credential

Under the One Big Beautiful Bill Act (OBBBA), the 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.

Transfers and Changes in Academic Program

Students transferring from one institution to another or from an Associate Degree program to a Bachelor’s Degree program will not be considered legacy students. 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 parent 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 remain legacy students under the old rules for the next 3 years, beginning Fall 2026.

Federal Pell Grant Changes

The Act includes revised eligibility requirements for the Federal Pell Grant:

  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 (such as a full-ride scholarship) to cover their entire cost of attendance, they cannot also receive 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.