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: "Legacy: Current Loan Borrowers" and "New Loan Borrowers."
Legacy: Current Loan Borrowers (Before July 1, 2026)
If you are a student or parent who received a federal loan before July 1, 2026 and continously enroll in the same program, you qualify for Legacy status. Legacy status will expire when you reach your program's Expected Time To Completion or up to three years (including 2627), whichever comes first. The following will apply to Legacy borrowers:
- Annual limits for Undergraduate, Graduate and Professional PharmD students remain unchanged.
- Parent PLUS Loan: Parent PLUS borrowers can continue to apply for loans up to the student's remaining Cost of Attendance while.
- Aggregate Loan Limits: The existing aggregate loan limits remain unchanged. Repaying principal restores eligibility to borrow more.
- Upon expiration of Legacy status, all new regulations apply which could result in drastic reductions or loss of aid eligibility.
New Loan Borrowers (On or After July 1, 2026)
If you are a student or parent taking out your first federal loan or beginning a new program on or after July 1, 2026, the following will apply to you:
- Annual Undergraduate and Graduate Loan Limits remain unchanged.
- Annual Professional PharmD Loan Limit is increased to $50,000.
- Parent PLUS Loans: These loans will have new borrowing caps. Parents can borrow a maximum of $20,000 per year, per student, with a lifetime maximum of $65,000 per student.
- Graduate PLUS Loans: The Graduate PLUS Loan program is no longer available.
- Aggregate Limits: The Aggregate Limit for Undergraduate students remain unchanged at $57,500. A Graduate student can receive an aggregate of $100,000 and a Professional PharmD student can receive up to $200,000 (includes Graduate loans).
- Overall Lifetime Maximum: A hard combined lifetime cap of $257,500 applies to all federal student loans across undergraduate, graduate and professional levels combined (includes Grad PLUS but not Parent PLUS). Repaying, discharging, or forgiving the loan does not restore eligibility.
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 (SOR).
Your Federal Loan eligibility will be tied directly to your credit load. This means, if you are enrolled less than full-time, your loan eligiblity will be reduced. If you plan on taking a less than full-time schedule, we encourage you to complete a Part-Time Enrollment Form.
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.