What the "One Big Beautiful Bill Act" Means for Our Students
On July 4, 2025, President Trump signed the “One Big Beautiful Bill Act” (also known as 'OB3') into law, a major budget package that will change federal student aid. While the law has passed, most of the changes are set to take effect for the 2026-2027 academic year, specifically on or after July 1, 2026. We're still getting the full details, but here's a summary of the key changes we know so far. You may also review updates on Studentaid.gov.
On this page:
Federal Pell Grant Changes
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. Also, students with an SAI that is more than double the maximum Pell Grant award will be automatically inelgible for the Pell Grant.
Federal Loan Changes
To make it easier to understand the changes coming to Federal Loans, we've divided the information into two groups: "Current Loan Borrowers" and "New Loan 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 Limits for Part-time Students
For part-time students, the OB3 introduces a major shift in how much you can borrow. Previously, if you were enrolled at least half-time, you could often borrow the full annual amount in Federal loan. With OB3, this changes significantly through a process called a Schedule of Reduction.
Your Federal Loan eligibility will be tied directly to your credit load. This means, if you are enrolled less than full-time, that your loan eligiblity will be reduced. The details and final rules for how the Schedule of Reductions will work has not been finalized.
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.
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 loans.
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.