One Big Beautiful Bill (OBBB)/Working Families Tax Act Updates
One Big Beautiful Bill (OBBB)/Working Families Tax Act
The information below reflects our current understanding of changes to federal financial aid under the “One Big Beautiful Bill”/Working Families Tax Act and should not be considered legal advice. Key details—including transition rules, eligibility criteria, and implementation timelines—remain subject to federal rulemaking and guidance from the U.S. Department of Education. This information may change as additional updates are released.
Information presented on this page is relevant to both undergraduate and graduate students. Please scroll to the second (undergraduate) or third (graduate) sections to find information related to your academic journey.
For the most recent published guidance, please consult this website, official communications from Messiah University, and federal resources at studentaid.gov/bigupdates. Students, borrowers, and parents may also contact the Federal Student Aid Information Center to receive assistance with general inquiries.
P.L. 119-21, also known as the One Big Beautiful Bill Act (OBBB), the Working Families Act, or the reconciliation bill, signed July 4, 2025, includes significant reforms to federal student aid programs. The law revises Pell Grant eligibility and award amounts, establishes new federal student loan limits—including the phaseout of Grad PLUS—requires prorated loans for students enrolled less than full time, and introduces a new income driven repayment plan. Most provisions take effect beginning in the 2026–27 academic year and will be implemented gradually. Several details still await federal rulemaking, and additional guidance will be provided as it becomes available.
No, your current aid and repayment terms will remain unchanged for now. The new loan limits and repayment options take effect in the 2026–27 academic year. We will continue to monitor federal guidance and share updates as they are released.
If you’re currently enrolled and participating in the student and/or parent loan programs at Messiah University, there are no changes to the aid you’ve already received.
If you (or your parent) borrowed any Federal direct loan for a term that begins before July 1, 2026, you will be eligible to borrow under the previous loan limits. If you are a graduate student, you may borrow additional Grad PLUS Loans under the previous loan limits to finish your current program of study or for three years, whichever is shorter.
Important note for graduate students: If you have not borrowed a Federal Direct Loan in your current program of study for a term beginning before July 1, 2026, but anticipate needing a Grad PLUS Loan for a term starting after that date, you should borrow a Direct Loan before the July 1, 2026 deadline to maintain eligibility for Grad PLUS under legacy provisions. No minimum borrowing amount is required.
To be eligible for the previous loan limits (including Grad 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.
Annual loan amounts will be prorated according to your enrollment level. This requirement applies to all loans disbursed for the 2026–27 academic year. Eligibility will be calculated at disbursement based on the number of credits defined as full-time for the academic year.
Most changes take effect starting with the 2026–27 academic year. That includes new loan limits, the phase-out of Grad PLUS, and changes to Pell Grant eligibility.
We’ll post updates on this website as new details become available. We can also suggest these additional resources:
"One Big Beautiful Bill Act Updates (FSA)
*OBBBA Updates last updated by the Department of Education on April 15, 2026.
OBBB/Working Families Tax Act Information for Undergraduate Students & Parents
The new law does not change the Federal Direct Loan annual or aggregate loan limits for undergraduate students, although undergraduate loans will now count towards the new lifetime limit.
- Annual Federal Direct Loan limit is $5,500-$12,500 based on year in school and dependency status.
- Aggregate Federal Direct Loan limit is $31,000-$57,500 based on dependency status.
- New lifetime Federal Direct Loan limit of $257,500 includes student borrowing for undergraduate, graduate, and professional study without regard to any amounts repaid, forgiven, canceled, or otherwise discharged.
Yes, but starting in the 2026–27 academic year, new limits apply:
- Parents will be capped at $20,000 per year and $65,000 lifetime in PLUS borrowing per student.
- If you already have Parent PLUS Loans or if your student already has Federal Direct Loans, you will be eligible for legacy provisions under the old, uncapped rules. Messiah University is waiting for the U.S. Department of Education to finalize those details.
Yes. Beginning in the 2026–27 academic year, students receiving non-federal, state or institutional aid that covers their full cost of attendance (COA) are ineligible to receive a Pell Grant.
No. Undergraduate students may only receive additional unsubsidized loan funds if exceptional circumstances—such as a parent’s adverse credit history—prevent the parent from borrowing a PLUS Loan. Reaching the aggregate borrowing limit does not qualify as an exceptional circumstance.
OBBB/Working Families Tax Act Information for Graduate & Professional Students
Grad PLUS Loans are being phased out.
New graduate and professional students will no longer be eligible to borrow Grad PLUS for terms that begin on or after July 1, 2026. If you’re already borrowing Grad PLUS before July 1, 2026, you will be allowed to continue under grandfathering rules. Messiah University expects further guidance from the U.S. Department of Education.
Starting in the 2026–27 academic year, new federal loan limits will apply to graduate and professional students:
- Graduate students will be limited to $20,500 per year in unsubsidized loans.
- Professional students (such as those in the MD program) will be limited to $50,000 per year in unsubsidized loans.
The lifetime cap for graduate-level borrowing will be $100,000, not including any undergraduate loans, and $200,000 for professional program borrowing. If you borrowed before July 1, 2026, you remain eligible for the previous loan limits.
The distinction between “graduate” and “professional” programs is defined in federal regulation (34 CFR § 668.2) and determines annual borrowing limits. According to the federal regulations, all graduate programs at Messiah University are classified as graduate—rather than professional—programs. We do not anticipate any programs at Messiah qualifying as professional programs.
Grad PLUS will be discontinued for new borrowers beginning in 2026–27, so it is important to review alternative funding options in advance. These may include:
- A historical list of private education lenders used by Messiah students
- Employer-sponsored education benefits
- Monthly payment plans through Messiah’s Transact eBill site
- External scholarships