The One Big Beautiful Bill Act
Key Changes to Federal Student Aid

The One Big Beautiful Bill Act (OB3) was signed into law on July 4, 2025 by President Donald J. Trump. which made changes to the higher education landscape, including federal student loan eligibility and repayment.  Several provisions went into effect immediately, while other provisions will begin on July 1, 2026.

There are no changes to federal student aid for the fall 2025 and spring 2026 terms.

Stony Brook University's Office of Financial Aid & Scholarship Services remains dedicated to supporting students and their families as they adjust to updates in federal financial aid programs. We will keep the University community informed and provide further updates as new guidance is released by the U.S. Department of Education.

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Notice: The information shared on this page is currently evolving.  Information on this page reflects the most current guidance available. Information may change as federal rules and guidelines are established and the university will update this page as new information is received.  Students and families are encouraged to monitor studentaid.gov for more information.

Last Updated: February 5, 2026

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FAFSA Form Changes

Beginning with the 2026-2027 academic aid year, the Student Aid Index asset calculation will exclude the following from the current net worth of business and farms and should not be reported as assets on the Free Application for Federal Student Aid (FAFSA) form:

• The current net worth of family-owned business (with fewer than 100 full-time employees or full-time equivalent).
• The net worth of farms on which the family resides.
• The net worth of family-owned-and-controlled commercial fishing business and related expenses.

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Federal Pell Grant Eligibility Changes (Effective July 1st, 2026)

Beginning with the 2026–27 award year:

• The foreign earned income exclusion amount reported on the FAFSA will be added to the adjusted gross income when determining Federal Pell Grant eligibility.
• Students who receive non-federal grants or scholarships covering the full Cost of Attendance will be ineligible for a Federal Pell Grant.
• Students with a Student Aid Index (SAI) equal to or greater than twice the maximum Federal Pell Grant award amount for the award year will be ineligible for the grant.
  • For example, if the max Pell amount for 2026–27 is $7,395, and a student has an SAI index of 14,790 or greater, the student will not be eligible for a Federal Pell Grant.
  • A limited exception applies for dependents of deceased service members and safety officers.

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Federal Loan Changes (Undergraduate students)

• New Limits for Parent PLUS Loans: New borrowers will have an annual limit of $20,000 and a aggregate limit of $65,000 per dependent student.
• Federal Loan Program Lifetime Loan Limits: $257,500 lifetime borrowing limit on all federal student loans, excluding PLUS Loans.

Federal Loan Changes (graduate students)

• Graduate PLUS Loans will no longer be available to new borrowers starting July 1, 2026.
• Legacy Provision: Existing students with a Federal Direct Loan disbursed before July 1, 2026, can continue under the current limits until the completion of their current program or for up to three additional years, whichever is less.
• Annual & Aggregate Loan Limits: $20,500 for graduate students and $50,000 for professional students.  Aggregate limits are $100,000 and $200,000 respectfully.  Amounts do not include amounts borrowed as a undergraduate level.

additional Federal Loan Changes

 

Annual Amount Proration for Less then Full-Time Enrollment

Loan amounts will be prorated based on enrollment status.  Less than full-time enrollment equals reduced eligibility.  Enrollment status is determined by the program in which a student is enrolled in.

Legacy Provision

If a borrower has a Federal Direct Loan made before July 1, 2026, while the dependent student is enrolled in a credentialed program, the parent or borrower can continue to borrow under current loan limits for 3 academic years or the remainder of the student’s expected time to credential, whichever is less.

Federal Loan Repayment

Revised income-based repayment (IBR) plans are effective now.
Two new repayment plans have been established for borrowers who receive loans on or after July 1, 2026

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FAQ's: Current Students

• Will the new law immediately affect my existing loans or aid?
  No. If you’re currently receiving aid at Stony Brook University in the 2025-2026 financial aid year, your loans and grants remain under their present terms for now. Most changes including new loan limits and repayment options will apply starting in the 2026 - 2027 financial aid year. We are monitoring federal guidance and will update you as details are finalized.
• Do I qualify for the legacy provisions?
  If you are currently enrolled at Stony Brook University for the Spring 2026 term and received a disbursement of any Federal Direct Student Loan before July 1, 2026, then for the program you are currently enrolled in you qualify for legacy borrowing status for up to an additional 3 years or when you complete your program whichever is less.
• If I take longer then three years to complete my program, what are my loan options?
  As a graduate student after three years, you will be subject to the new Direct Unsubsidized limits, and you will no longer be able to borrow the Grad PLUS loan.
• If I take a leave of absence during my program?
  After you return from your leave of absance, you will be considered a new borrower for federal Title IV aid and you will be subject to the new guidelines and limits as setup in the bill.
• Im currently enrolled in one program but plan on attending a different program in the fall, how will this effect me as a graduate student?
  Since you will be starting a new program in the fall term you will follow the new guidelines as such you will not have the ability to borrow the Graduate PLUS Loan and fall under the new federa loan limits.
• Will these changes affect my Work-Study?
  No. The new law does not change how students qualify for Federal Work-Study. At this time, Work-Study eligibility will continue to be based on financial need as determined by the FAFSA and institutional packaging policies.
• Do I need to do anything?
  No action is required right now. Your loans and financial aid continue under current rules for the 2025 - 2026 academic year. As changes begin to take effect, mostly starting in the 2026 - 2027 academic year, we’ll provide additional guidance.  Continue to review this page for additional information and guidance.

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FAq's: New Students

• I am starting a new graduate/professional program in the Fall 2026. What loans am I eligible for?
  If you start a new graduate/professional program your loan eligible with be based on the new rules and your loan eligibility will include the Direct Federal Unsubsidized Loan.
• Since the Direct Graduate PLUS loans will be eliminated for new borrowers, what other loan options are available to me?

  Federal Unsubsidized Loan: For those students who can complete the FAFSA, students will be able to receive a Federal Unsubsidized Loan to help cover costs of their education.

  Private Educational Loans: These are offered by private lenders, banks, and credit unions. The terms can vary depending on the lender and normally require a credit check. It is important to compare interest rates, repayment terms, and borrower protection policies offered by each lender. 

• Is my program a Professional or Graduate program? How can I find that out?

  The distinction between “graduate” and “professional” programs is defined in federal regulation (34 CFR § 668.2) and affects how much you can borrow each year. Professional programs are typically those that signify completion of academic requirements for beginning work or practice in a given profession, are generally at the doctoral level, and lead directly to a degree required for licensure in a recognized profession, such as medicine (MD).  The federal regulations include the following programs in the definition:

  • Pharmacy (Pharm.D.);
  • Dentistry (D.D.S. or D.M.D.);
  • Veterinary Medicine (D.V.M.);
  • Chiropractic (D.C. or D.C.M.);
  • Law (L.L.B. or J.D.);
  • Medicine (M.D.);
  • Optometry (O.D.);
  • Osteopathic Medicine (D.O.),;
  • Podiatry (D.P.M., D.P., or Pod.D.);
  • Theology (M.Div., or M.H.L.); and
  • Clinical Psychology (Psy.D. or Ph.D.)

  All other post-baccalaureate programs—including most master’s and PhD programs are classified as graduate.

• What if I plan to borrow federal loans for a future academic year and will not be enrolled full-time?

  The new law requires annual loan amounts to be prorated in direct proportion to your enrollment status. This change is effective with all loans borrowed for the 2026 - 2027 academic year. 

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