Federal Financial Aid Changes

What OCC Students Need to Know About the One Big Beautiful Bill (OBBA or OB3) Act 

Beginning July 1, 2026, federal financial aid regulations will change under the One Big Beautiful Bill Act (OBBBA, or OB3). The OBBBA (signed in July 2025) makes financial aid much more sensitive to how many credits you take. This is now required nationwide beginning in 2026-27. These changes affect:

• Federal student loan eligibility based on enrollment level
• Parent PLUS Loan borrowing limits
• Federal Pell Grant eligibility and Cost of Attendance rules

 

Community College Impact

At community colleges, where many students attend part-time, this typically means less aid (especially loans and sometimes grants) if you take fewer credits. Many students take 6-11 credits per term, so their loan access shrinks proportionally, which can leave funding gaps. 

 

Federal Student Loan Changes

Loan Proration Based on Enrollment

If you accept federal student loans, you understand that the amount you can receive depends on your enrollment level. If you are enrolled in fewer than 12 credit hours (less than full-time), your loan may be reduced (prorated) under federal law.

Undergraduate students are considered full-time when registered for 12 or more credits per semester, totaling 24 or more credits during the fall/winter academic year.

 

Federal Student Loan Aggregate Limits

Federal student loans are also subject to lifetime (aggregate) borrowing limits for undergraduate students:

• Independent undergraduate students: up to $57,500 total in federal student loans.
• Dependent undergraduate students: up to $31,000 total in federal student loans.

These limits apply without regard to any amounts that may have been forgiven, repaid, canceled, or discharged.

Federal student loans are also subject to lifetime (aggregate) borrowing limits for undergraduate students:

Independent undergraduate students: up to $57,500 total in federal student loans.
Dependent undergraduate students: up to $31,000 total in federal student loans.
These limits apply without regard to any amounts that may have been forgiven, repaid, canceled, or discharged.

 

How Much of My Loan Can I Receive?

Loan eligibility is awarded by semester as a percentage of your annual loan limit:

• Students enrolled in 12 or more credits in a semester are eligible for 50% of the annual loan limit for that semester.
• For students enrolled in fewer than 12 credits, eligibility is prorated as follows: 

*Loan amounts in this example are based on $2,750, which represents one semester of eligibility for a dependent freshman student with a $5,500 annual loan limit. These are estimated amounts provided for illustration purposes only. Actual loan amounts may vary and are subject to origination fees or other applicable loan reductions.

 

*Loan amounts in this example are based on $4,750, which represents one semester of eligibility for an independent freshman student with a $9,500 annual loan limit. These are estimated amounts provided for illustration purposes only. Actual loan amounts may vary and are subject to origination fees or other applicable loan reductions.

 

By accepting your loan, you acknowledge that you understand these enrollment requirements and how they may impact your loan eligibility.

Your loan amount is based on the number of credits you are taking at the time funds are disbursed. If you add, drop, or withdraw classes, your loan eligibility may change. You are responsible for reviewing your schedule and understanding how enrollment changes may affect your financial aid. If you reduce your enrollment after receiving funds, you may be required to repay a portion of your loan. Please contact the Financial Aid Office if you have questions about your loan eligibility before making any registration changes. The Financial Aid Office can be reached at (248) 341-2240.

 

Parent PLUS Loan Changes

Beginning July 1, 2026, new federal limits will apply to Parent PLUS Loans:

• Annual Limit: $20,000 per dependent student per academic year
• Lifetime (Aggregate) Limit: $65,000 per dependent student

These limits apply per student, and the annual and lifetime caps are combined for both parents. This means that if two parents borrow Parent PLUS Loans for the same student, their total combined borrowing cannot exceed $20,000 per year or $65,000 overall for that student. These limits apply without regard to any amounts that may have been forgiven, repaid, canceled, or discharged.

Previously, parents could borrow up to the full Cost of Attendance (minus other aid). These new caps may impact families who rely on Parent PLUS funding to cover remaining educational expenses.

 

Federal Pell Grant and Cost of Attendance Changes

Beginning with the 2026–2027 award year:

• Students whose institutional, state, or private scholarships and grants fully cover their Cost of Attendance will no longer be eligible to receive a Federal Pell Grant.
• Students with a Student Aid Index (SAI) equal to or greater than twice the maximum Pell Grant award may not qualify for Pell eligibility 

These changes may affect students who previously qualified for Pell Grants while also receiving significant scholarship support.

 

Stay Informed and Plan Ahead

These changes represent significant updates to federal aid rules. Your eligibility and borrowing ability may be affected depending on your enrollment level, financial profile, and the timing of FAFSA filing and loan applications. Here are a few tips:

• Complete the FAFSA early for the 2026–27 academic year.
• Review your enrollment status each term to anticipate loan eligibility.
• Consult with Financial Aid if you receive significant non-federal aid (like scholarships) that affect Pell Grant eligibility.

For questions about how these changes apply to your situation, contact the OCC Financial Aid Office — we’re here to help you navigate these updates and plan responsibly for your education.

 

Student FAQs

In July 2025, the President of the United States signed into law major changes to the U.S. tax code, as well as federal programs that receive mandatory funding, such as federal student loans. We realize many OCC students have concerns about how these changes might affect their ability to pay for college. This page will answer many of these questions, and will be updated as more information becomes available.

 

Parent FAQs

 

Additional Resources

• Federal Student Aid: Big Updates to Federal Student Aid
• Federal Updates