What the "One Big Beautiful Bill Act" Means for Our Students
On July 4, 2025, President Trump signed the “One Big Beautiful Bill Act” into law, a major budget package that will change federal student aid. We're still getting the full details, but here's a summary of the key changes we know so far.
On this page:
Federal Pell Grant Updates
Starting July 1, 2026, students who receive other non-federal scholarships that fully cover or exceed their cost of attendance will no longer be eligible for the Pell Grant for that semester. This semester will still count toward their 12-semester lifetime limit.
Student Earnings to Determine Loan Access
A new provision links a college program's eligibility for federal loans to how much its graduates earn. If graduates of a specific program earn less on average than a high school graduate, that program could lose access to federal student loans.
Student and Parent Loan Changes
The most significant changes in the new law will take effect on July 1, 2026. To make it easier to understand, we've divided the information into two groups: "Current Borrowers" and "New Borrowers."
Current Loan Borrowers (Before July 1, 2026)
If you are a student or parent who takes out a federal loan before July 1, 2026, the following will apply to you:
- Undergraduate Student Loans: Annual limits for subsidized and unsubsidized student loans will not change.
- Graduate Student Loans: The annual limit for unsubsidized student loans remains at $20,500.
- Parent PLUS Loans: Parent PLUS borrowers can continue to apply for loans throughout their student's current program of study or for three academic years, whichever is shorter. They will not be affected by the new annual or lifetime loan limits.
- Lifetime Loan Limit: The existing lifetime loan maximum for all federal student loans ($138,500), which includes undergraduate and graduate borrowing, will not change for you.
New Loan Borrowers (On or After July 1, 2026)
If you are a student or parent taking out your first federal loan on or after July 1, 2026, the following will apply to you:
- Parent PLUS Loans: These loans will have new borrowing caps. Parents can borrow a maximum of $20,000 per year, with a lifetime maximum of $65,000 per student.
- Graduate Student Loans: The Graduate PLUS Loan program will be discontinued. Graduate students will be limited to a new lifetime borrowing maximum of $100,000 for unsubsidized loans. Students pursuing a PharmD will have a higher annual limit of $50,000 and a lifetime maximum of $200,000.
- Overall Lifetime Loan Maximum: All new borrowers will have a total lifetime borrowing maximum of $257,500 across all their federal student loans. This limit does not include any Parent PLUS loans.
Federal Loan Repayment Changes
The new law also introduces several changes to how students and parents can repay their loans. More information on this will be shared as it becomes available from the Department of Education.
Our Commitment to Our Students
The UH Hilo Financial Aid Office is dedicated to helping students and families navigate these changes. We will continue to closely monitor new guidelines from the Department of Education and will update this webpage and our campus community as needed. The UH President also shared a message on July 21, 2025, which you can read online at UH News.