Important Updates to Federal Student Loans and Pell
The One Big Beautiful Bill Act passed by Congress introduces significant changes to federal financial aid programs beginning in the 2026-2027 academic year.
For the most current updates, please visit the FSA One Big Beautiful Bill Act Updates page.
Federal Loan Changes
Loan amounts will be adjusted based on your enrollment
Starting Fall 2026, your federal loan award will be calculated based on the number of credit hours you are enrolled in.
- Full time (12 or more credits): You will receive your full awarded loan amount
- Below 12 credits (6-11): Your loan amount will be reduced depending on the number of credit hours you have enrolled in.
- Less than half time(fewer than 6 credits): You are not eligible for federal student loans.
Dropping classes could impact your future loan amount
- If you drop below the enrollment level used to calculate your loan after your loan is disbursed, it won’t change what you already received, but it will reduce how much you’re eligible for in future semesters within the same school year.
- Example: A student receives $1,750 in the fall based on full-time enrollment, then drops to 6 credit hours after the loan is disbursed. Because their annual eligibility is based on their enrollment across both semesters, dropping in the fall reduces what is left for spring.
Enrollment example Fall
Spring
Enrollment
12 credits (dropped to 6 after disbursement)
12 credits
Loan Amount
$1,750
$1,750 → $875
- Example: A student receives $1,750 in the fall based on full-time enrollment, then drops to 6 credit hours after the loan is disbursed. Because their annual eligibility is based on their enrollment across both semesters, dropping in the fall reduces what is left for spring.
New limits on Parent Plus loans
Starting July 1, 2026, parents who borrow a Parent PLUS Loan on behalf of a dependent student will have new annual and lifetime limits:
- Annual limit: $20,000 per dependent student
- Lifetime limit: $65,000 per dependent student (combined across all parents)
Parents who borrowed a Parent PLUS Loan before July 1, 2026, may be able to continue borrowing under the previous rules for up to three academic years or the remainder of their student’s program, whichever comes first.
Loan Repayment Updates
Current Borrowers
Most borrowers can stay on their existing repayment plans. However, if you are currently enrolled in an Income-Contingent Repayment (ICR), Pay As You Earn (PAYE), or SAVE plan, you will need to transition to a different repayment plan by July 1, 2028.
Future Borrowers
Students who take out loans on or after July 1, 2026, will have two repayment options:
- Tiered Standard Plan: repayment over 10 to 25 years based on your loan balance
- Repayment Assistance Plan (RAP): an income-driven option where your payment is based on what you earn
Pell Grant Changes
If you receive non-federal grants or scholarships (from a state program, a private organization, or MCC) that fully cover your cost of attendance, you will no longer be eligible for a Pell Grant.
- MCC’s cost of attendance ranges from approximately $15,000 to $21,000 per year, depending on your situation, including tuition, fees, books and supplies, housing, transportation, and more.
- Most MCC students receiving a Pell Grant are unlikely to reach this limit. Even students who receive outside tuition assistance are unlikely to be impacted by this change