Major Federal Student Aid Changes Take Effect, Including New Repayment Plans and Loan Limits

Significant changes to federal student aid programs, enacted under the One Big Beautiful Bill Act, are now in effect as of July 1, 2026. These updates include revised FAFSA rules that exclude family farms and small businesses from asset calculations, new Pell Grant eligibility criteria (students with full cost of attendance scholarships/grants are ineligible), and a streamlining of income-driven repayment (IDR) plans to two options: a modified standard plan and a new Repayment Assistance Plan (RAP). Additionally, new loan limits are in place for Direct PLUS loans, and a temporary interest rate reduction for borrowers enrolled in auto-pay has increased from 0.25% to 1%. The Federal Student Aid office is offering webinars in August 2026 to guide schools through these new regulations.