Major Financial Aid Changes Coming in 2026–27: What College Access Professionals Need to Know

The 2026–27 Free Application for Federal Student Aid (FAFSA®) cycle marks a turning point in how federal student aid is awarded and managed, driven largely by changes under H.R. 1 (“Big Beautiful Bill”). For professionals supporting students and families, it is critical to understand how these updates will affect aid eligibility, award levels, and repayment structures and how best to prepare your communities.

Pell Grant Changes: Higher Credit Loads, New Eligibility Rules

One of the most immediate impacts is the change to Pell Grant eligibility:

• The standard for full-time enrollment will rise from 12 to 15 credits per semester (30 credits per year). Students taking fewer than 15 credits will see proportional reductions in their Pell awards. Those at 12 credits, previously considered full-time could lose up to $1,500 per year in aid.
  

• Pell Grants will no longer be available to students enrolled in under half-time programs (5 or fewer credits per semester), unless they are in a qualified workforce training program (A qualified workforce training program provides individuals with targeted skills and knowledge for specific occupations, particularly in high-demand fields. These programs are typically connected to a state’s public workforce system and may be funded through initiatives like the Workforce Innovation and Opportunity Act (WIOA). To locate options, students and families can explore their state’s Eligible Training Provider List (ETPL) or contact a local American Job Center for guidance.)
  

• The introduction of a “Pell cliff” means Pell awards will phase out abruptly at a defined Student Aid Index (SAI) limit rather than tapering off gradually based on need.
  

Federal Loans: Subsidized Loans Eliminated, New Borrowing Caps Students and families relying on federal loans will also face new restrictions:

• Subsidized direct loans will be eliminated. All future federal loans will accrue interest from the time funds are disbursed.
  

• Parent PLUS and Grad PLUS loans will be capped:

  • Parent PLUS: $65,000 lifetime

  • Grad PLUS: $100,000 lifetime (or $200,000 for professional degrees)
    

• A new lifetime borrowing cap will limit total federal student loan debt to $257,000.
  

• Income-driven repayment plans (IDR) will be consolidated into two options:

  • A fixed, mortgage-style repayment plan over 10–25 years

  • A Repayment Assistance Plan (RAP) that sets payments at 1–10% of income, with a $10 monthly minimum and forgiveness after 30 years
    

• Hardship deferments (including for unemployment or economic hardship) will be eliminated, leaving only standard forbearance.
  

Institutional Accountability: New Risks for Colleges

Colleges will face added pressure as:

• Programs where graduates earn less than the median high school graduate salary in the state may lose access to federal student loans.
  

• Pell Grants will be available for certain short-term, workforce-oriented training programs, expanding opportunities beyond traditional degrees.
  

Implications for College Access Work

For professionals guiding students and families, these changes require proactive planning:

• Advising on credit loads will be critical. Students must understand the financial consequences of enrolling in fewer than 15 credits per semester.
  

• Loan counseling will need to address the loss of subsidized options, the reality of interest accrual from day one, and stricter borrowing limits.
  

• Emphasis on workforce Pell options may help students who need flexible or short-term pathways.
  

• College list building should factor in institutional accountability risks — programs with poor graduate earnings outcomes may face aid access issues.
  

Next Steps for the Field

• Update training materials, presentations, and handouts to reflect these new standards well before the 2026–27 cycle begins. We have begun developing free materials and it will be ready in time for the 2025-26 school year for your use.
  

• Consider offering credit load planning workshops so students understand how to retain full Pell eligibility.
  

• Build partnerships with workforce training programs that will qualify for the new workforce Pell.
  

• Stay connected to policy updates and institutional changes, as implementation guidance from the Department of Education will shape final details.
  

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