Reconciliation Bill Comparison Summary - Financial Aid and Scholarships

Federal Financial Aid Program/Area	Existing Standards or Terms (prior to Reconciliation Bill)	Reconciliation Bill Change	Notes
Federal Direct Student Loans – Annual/Aggregate Borrowing Limits	Graduate and Professional students Annual Loan Limit: up to $20,500 per year Aggregate Borrowing Limit: $138,500 (includes federal direct student loan amounts borrowed as an undergraduate student) Undergraduate students Annual Loan Limit for Dependent Students: up to $7,500 per year depending upon grade level Annual Loan Limit for Independent Students: up to $12,500 per year depending on grade level Aggregate Borrowing Limit for Dependent Students: $31,000 Aggregate Borrowing Limit for Independent Students: $57,500	Professional students Annual Loan Limit: Increase to up to $50,000 per year (from $20,500) Aggregate Borrowing Limit: $200,000 (excludes borrowing as an undergraduate) Graduate students Annual Loan Limit: No Change (remains at up to $20,500 per year) Aggregate Borrowing Limit: $100,000 (excludes borrowing as an undergraduate student) Undergraduate students Annual Loan Limit: No Change (remains at up to $7,500 per year for dependent students and up to $12,500 for independent students, each depending upon grade level) Aggregate Borrowing Limit: No change (remains at $31,000 for dependent students and $57,500 for independent students) (Grandfathered/legacy provisions for 3 years for eligible students who had a Federal Direct Student Loan* disbursed prior to July 1, 2026; these “legacy” provisions would allow eligible students to continue under existing annual and aggregate limits) *There is debate whether the language in the Reconciliation Bill allows disbursement (prior to 07/01/26) of any type of federal student loan to trigger these “legacy” provisions, or whether it requires disbursement (prior to 07/01/26) of specifically a Subsidized or Unsubsidized loan.	The increase to the annual borrowing limit for Unsubsidized Federal Direct Loans for students enrolled in Professional degree programs will offset some of the loss of the GradPLUS loan program (see below); Note the increased annual limit of $50,000 is an additional $29,500 above existing annual limit for students enrolled in Professional degree programs Students in certain health-related programs (at the graduate and professional levels) currently have exceptions for higher annual loan limits; it is unclear if the new loan limits supersede, or supplement, these higher limits for the eligible health-related programs
Graduate PLUS Federal Student Loan Program(GradPLUS)	Annual Loan Limit : Students enrolled at least half-time in a graduate or professional degree program can borrow up to their Title IV Cost of Attendance (direct and indirect costs) less any other financial aid received Aggregate Borrowing Limit : There are no aggregate or lifetime limits on GradPLUS borrowing	Eliminates GradPLUS loan program effective beginning with the 2026-27 academic year (Grandfathered/legacy provisions for 3 calendar years for eligible students who had a GradPLUS loan* disbursed prior to July 1, 2026; these “legacy” provisions would allow eligible students to continue borrowing under the GradPLUS program) *There is debate whether the language in the Reconciliation Bill allows disbursement (prior to 07/01/26) of any type of federal student loan to trigger these “legacy” provisions, or whether it requires disbursement (prior to 07/01/26) of specifically a GradPLUS loan.	As noted above, the annual limit for borrowing under the Federal Direct Student Loan will increase for students enrolled in Professional degree programs, which will mitigate some of the loss of borrowing under the GradPLUS loan program. However, for students enrolled in Graduate degree programs, as well as some students enrolled in Professional degree programs, the loss of the GradPLUS program leaves private student loans as the primary remaining option for funding
Federal Direct Student Loans – Lifetime Borrowing Limits	No “lifetime” borrowing limit exists across all federal student loan programs (Subsidized, Unsubsidized, and GradPLUS)	New $257,500 lifetime borrowing limit on all federal student loans For a dependent student whose parent(s) borrowed a Parent PLUS loan on their behalf, the PLUS loan amount is excluded from this lifetime total (Grandfathered/legacy provisions for 3 calendar years for eligible students who had a federal student loan disbursed prior to July 1, 2026; although it is not specific and clear, we believe these “legacy” provisions would allow eligible students to continue borrowing (for up to 3 calendar years) under the Federal Direct Student Loan programs regardless of their lifetime borrowing total)	This new limit will affect students who have prior borrowing under any Federal Direct Student Loan Program (Subsidized, Unsubsidized, and GradPLUS). Students who have lifetime borrowing totals above $257,500 will likely need to utilize private loans as their primary funding option
Loan Proration	Undergraduate students in their final semester of their undergraduate degree program of study must have their annual loan limit prorated if their remaining period of enrollment is less than a full academic year	All annual loan limits must be prorated based on the student’s enrollment status when the enrollment status is less than full-time Applies to students enrolled in Undergraduate, Graduate, and Professional degree programs who borrow any type of Federal Direct Student Loan and are not enrolled full-time	This new loan proration rule will reduce allowable borrowing limits by the percentage of enrollment. For example, a fourth-year student enrolled in an undergraduate degree program three-quarter-time would be eligible for an annual maximum of $5,625 ($7,500 annual limit x 0.75 = $5,625) under the Federal Direct Student Loan program (Subsidized and Unsubsidized combined). It is unclear whether the proration rule applies to the entire school year or on a semester-by-semester basis. We will update guidance as we receive clarification on how this rule will be administered. This provision did not have an effective date, but the U.S. Department of Education announced on July 18, 2025 in Dear Colleague Letter GEN-25-04 that it is currently developing the schedule of loan reductions required by proration and will submit the schedule for public comment later this year; once the revised schedule of reductions is issued, schools must use it for students enrolled less than full time during academic years 2026-27 and beyond.
Parent PLUS Federal Student Loan Program (ParentPLUS)	The parent of a dependent student who is enrolled at least half-time in an undergraduate degree program can borrow up the Title IV Cost of Attendance (direct and indirect costs) less any other financial aid received. There are no aggregate or lifetime limits on ParentPLUS borrowing.	All parents may borrow up to a combined $20,000 per year per dependent student and a $65,000 aggregate limit per dependent student (Grandfathered/legacy provisions for 3 years for parent borrowers who had a ParentPLUS loan disbursed prior to July 1, 2026 and on behalf of a student enrolled for a period prior to July 1, 2026; these “legacy” provisions would allow eligible students to have a parent borrower, or parent borrowers, continue borrowing under the existing ParentPLUS terms)	Additional guidance is needed to clarify how these new guidelines will be administered
Federal Pell Grant – Short Term Programs (a/k/a “Workforce Pell”)	Students enrolled in short term programs less than an academic year (i.e., 30 instructional weeks) in length for the entire program are generally ineligible for Federal Pell Grant funding	Short-term programs of less than 15 instructional weeks in length are now eligible for students to receive Federal Pell Grants	Currently there are no qualifying short-term programs at the U
Federal Pell Grant – Eligibility for students with full COA aid	Federal Pell Grants have long been considered an entitlement; that is, if a student is eligible for the Pell Grant, the full amount of eligibility must be paid to the student When a student receives an overaward (defined as the case in which a student receives total aid from all sources in excess of their Cost of Attendance (COA)), the Pell Grant must not be reduced; rather, other aid is reduced to resolve the overaward, and in some very limited situations the overaward is allowed.	Students who receive grants or scholarships from non-federal sources covering their entire COA are ineligible to receive a Federal Pell Grant, even if otherwise eligible	Additional guidance is needed to clarify how these new guidelines will be administered
FAFSA data elements and Need Analysis	Family farm and family-owned small business net asset values must be reported on FAFSA and included in need analysis calculations Foreign income excluded from Adjusted Gross Income (AGI) in need analysis, particularly when affecting Federal Pell Grant eligibility Regardless of Student Aid Index (SAI) calculation (from need analysis formula), students could be determined as eligible for a minimum or maximum Federal Pell Grant	Exempts net asset value of a family farm and/or family-owned small business from being reported on the FAFSA or included in the need analysis calculations Foreign income must be included in the AGI in need analysis and a financial aid administrator can no longer exclude it when a reported foreign income prevented a student from being eligible for a Federal Pell Grant If a student’s SAI is more than twice the amount of the maximum Pell Grant award, the student is not eligible for a Federal Pell Grant regardless of any need analysis calculations or other indications of such eligibility
Institutional Accountability	No such measure currently exists	New accountability measure that would cause an academic program to lose Federal Direct Student Loan eligibility if its graduates fail the “low earnings outcomes" measure 2 out of 3 years	Additional guidance is needed to clarify how these new guidelines will be administered
Federal Student Loan Repayment	There were multiple provisions related to student loan repayment, including loan repayment options and loan forgiveness programs. The U.S. Department of Education (a) issued high-level guidance on some issues in Dear Colleague Letter GEN-25-04 (published on 07/18/2025) and (b) announced on 07/25/2025 intent to hold negotiated rulemaking to develop regulations around many of the components in the Reconciliation Bill. Until more information is available, the following topical summary is a guide to the changes made by the Reconciliation Bill (some of the descriptions below are from a summary prepared by the National Association of Student Financial Aid Administrators); all references to ‘loans’ and ‘borrowers’ below are to the federal student loan programs: *Deferment of loan repayment options* – the bill ends the economic hardship deferment and the unemployment deferment; borrowers with federal student loans made on or before 07/01/2027 are still able to use these two deferment options under the current rules; once all of a borrower’s loans made prior to 07/01/2027 are paid in full, these options will cease to exist *Forbearance of loan repayment* – the bill changes forbearance for any federal student loans made on or after 07/01/2027 such that these loans are eligible for forbearance for up to nine months maximum in any two-year period. Current rules allow for a forbearance up to 12 months at a time, with a cumulative limit of three years. *Loan rehabilitation* – the bill allows borrowers to rehabilitate a defaulted loan twice, as opposed to once under current/existing rules; the minimum rehabilitation payment for Federal Direct Loans changes to $10 *Standard repayment plan (SRP)* – the bill creates a new standard plan with four fixed terms of 10, 15, 20, or 25 years based on the amount borrowed (or outstanding balance if in repayment) *New income-based repayment plan (RAP)* – the bill creates a new income-based repayment plan called the Repayment Assistance Plan (RAP) in which the monthly payment is one to ten percent of income based on the borrower’s Adjusted Gross Income with reductions to the base payment for each dependent the borrower has; there is a $10 minimum monthly payment and no cap on monthly payment amount, and a 30-year repayment period; this change eliminates negative amortization *New borrowers entering repayment* – new loans made on or after 07/01/2026 can be repaid using only two plans—a new standard repayment plan (SRP) or the new income-based repayment plan (RAP); a borrower with such new loans who does not select a plan will be assigned to the SRP; note that all loans must be paid under the same repayment plan, thus, borrowers with loans made before 07/01/2026 who take out additional loans on or after this date will only have RAP and SRP as options *Current borrowers entering or in repayment* – borrowers with no new loans made on or after 07/01/2026 are eligible to enroll in the current Standard, Graduated, Extended, or existing Income-Based (IBR) repayment plans, and they may also opt into the new RAP; current borrowers may also switch between, enter or remain on existing income-driven repayment plans until 07/01/2028 *Existing Income-Based Repayment (IBR) plan* – the bill removes the requirement for borrowers in the existing IBR plan to demonstrate a partial financial hardship; the bill retains cancellation of balances of loans repaid under IBR at 25 years (or 20 years for new borrowers) *Repayment options for Consolidation loans* – Consolidation loans made on or after July 1, 2026 are only eligible for the RAP or SRP; there are several additional provisions applying to Consolidation loans in which decisions or actions must be made prior to 07/01/2028 and if not, then all eligible loans will be automatically moved to RAP and any loans not eligible for RAP will be moved to IBR; if you are or will be considering consolidating your federal student loans, be sure to consult with your loan servicer(s) regarding options *Repayment options for ParentPLUS loans* – all new ParentPLUS loans made on or after 07/01/2026 must be repaid under the SRP and are not eligible for RAP; should a borrower choose RAP for an ineligible loan such as ParentPLUS, they must repay the ineligible loans separately (for borrowers who had borrowed a ParentPLUS loan prior to 07/01/2026 and subsequently borrowed from the program on or after 07/01/2026, repayment must be under the same repayment plan which will be SRP)

Federal Financial Aid Program/Area

Existing Standards or Terms (prior to Reconciliation Bill)

Reconciliation Bill Change

Notes

Federal Direct Student Loans – Annual/Aggregate Borrowing Limits

Graduate and Professional students

Annual Loan Limit: up to $20,500 per year

Aggregate Borrowing Limit: $138,500 (includes federal direct student loan amounts borrowed as an undergraduate student)

Undergraduate students

Annual Loan Limit for Dependent Students: up to $7,500 per year depending upon grade level
Annual Loan Limit for Independent Students: up to $12,500 per year depending on grade level

Aggregate Borrowing Limit for Dependent Students: $31,000

Aggregate Borrowing Limit for Independent Students: $57,500

Professional students

Annual Loan Limit: Increase to up to $50,000 per year (from $20,500)

Aggregate Borrowing Limit: $200,000 (excludes borrowing as an undergraduate)

Graduate students

Annual Loan Limit: No Change (remains at up to $20,500 per year)

Aggregate Borrowing Limit: $100,000 (excludes borrowing as an undergraduate student)

Undergraduate students

Annual Loan Limit:
No Change (remains at up to $7,500 per year for dependent students and up to $12,500 for independent students, each depending upon grade level)

Aggregate Borrowing Limit:
No change (remains at $31,000 for dependent students and $57,500 for independent students)

(Grandfathered/legacy provisions for 3 years for eligible students who had a Federal Direct Student Loan* disbursed prior to July 1, 2026; these “legacy” provisions would allow eligible students to continue under existing annual and aggregate limits)

*There is debate whether the language in the Reconciliation Bill allows disbursement (prior to 07/01/26) of any type of federal student loan to trigger these “legacy” provisions, or whether it requires disbursement (prior to 07/01/26) of specifically a Subsidized or Unsubsidized loan.

The increase to the annual borrowing limit for Unsubsidized Federal Direct Loans for students enrolled in Professional degree programs will offset some of the loss of the GradPLUS loan program (see below); Note the increased annual limit of $50,000 is an additional $29,500 above existing annual limit for students enrolled in Professional degree programs

Students in certain health-related programs (at the graduate and professional levels) currently have exceptions for higher annual loan limits; it is unclear if the new loan limits supersede, or supplement, these higher limits for the eligible health-related programs

Graduate PLUS Federal Student Loan Program(GradPLUS)

Annual Loan Limit :

Students enrolled at least half-time in a graduate or professional degree program can borrow up to their Title IV Cost of Attendance (direct and indirect costs) less any other financial aid received

Aggregate Borrowing Limit :

There are no aggregate or lifetime limits on GradPLUS borrowing

Eliminates GradPLUS loan program effective beginning with the 2026-27 academic year

(Grandfathered/legacy provisions for 3 calendar years for eligible students who had a GradPLUS loan* disbursed prior to July 1, 2026; these “legacy” provisions would allow eligible students to continue borrowing under the GradPLUS program)

As noted above, the annual limit for borrowing under the Federal Direct Student Loan will increase for students enrolled in Professional degree programs, which will mitigate some of the loss of borrowing under the GradPLUS loan program.

However, for students enrolled in Graduate degree programs, as well as some students enrolled in Professional degree programs, the loss of the GradPLUS program leaves private student loans as the primary remaining option for funding

Federal Direct Student Loans – Lifetime Borrowing Limits

No “lifetime” borrowing limit exists across all federal student loan programs (Subsidized, Unsubsidized, and GradPLUS)

New $257,500 lifetime borrowing limit on all federal student loans

For a dependent student whose parent(s) borrowed a Parent PLUS loan on their behalf, the PLUS loan amount is excluded from this lifetime total

(Grandfathered/legacy provisions for 3 calendar years for eligible students who had a federal student loan disbursed prior to July 1, 2026; although it is not specific and clear, we believe these “legacy” provisions would allow eligible students to continue borrowing (for up to 3 calendar years) under the Federal Direct Student Loan programs regardless of their lifetime borrowing total)

This new limit will affect students who have prior borrowing under any Federal Direct Student Loan Program (Subsidized, Unsubsidized, and GradPLUS). Students who have lifetime borrowing totals above $257,500 will likely need to utilize private loans as their primary funding option

Loan Proration

Undergraduate students in their final semester of their undergraduate degree program of study must have their annual loan limit prorated if their remaining period of enrollment is less than a full academic year

All annual loan limits must be prorated based on the student’s enrollment status when the enrollment status is less than full-time

Applies to students enrolled in Undergraduate, Graduate, and Professional degree programs who borrow any type of Federal Direct Student Loan and are not enrolled full-time

This new loan proration rule will reduce allowable borrowing limits by the percentage of enrollment. For example, a fourth-year student enrolled in an undergraduate degree program three-quarter-time would be eligible for an annual maximum of $5,625 ($7,500 annual limit x 0.75 = $5,625) under the Federal Direct Student Loan program (Subsidized and Unsubsidized combined).

It is unclear whether the proration rule applies to the entire school year or on a semester-by-semester basis. We will update guidance as we receive clarification on how this rule will be administered.

This provision did not have an effective date, but the U.S. Department of Education announced on July 18, 2025 in Dear Colleague Letter GEN-25-04 that it is currently developing the schedule of loan reductions required by proration and will submit the schedule for public comment later this year; once the revised schedule of reductions is issued, schools must use it for students enrolled less than full time during academic years 2026-27 and beyond.

Parent PLUS Federal Student Loan Program (ParentPLUS)

The parent of a dependent student who is enrolled at least half-time in an undergraduate degree program can borrow up the Title IV Cost of Attendance (direct and indirect costs) less any other financial aid received.

There are no aggregate or lifetime limits on ParentPLUS borrowing.

All parents may borrow up to a combined $20,000 per year per dependent student and a $65,000 aggregate limit per dependent student

(Grandfathered/legacy provisions for 3 years for parent borrowers who had a ParentPLUS loan disbursed prior to July 1, 2026 and on behalf of a student enrolled for a period prior to July 1, 2026; these “legacy” provisions would allow eligible students to have a parent borrower, or parent borrowers, continue borrowing under the existing ParentPLUS terms)

Additional guidance is needed to clarify how these new guidelines will be administered

Federal Pell Grant – Short Term Programs (a/k/a “Workforce Pell”)

Students enrolled in short term programs less than an academic year (i.e., 30 instructional weeks) in length for the entire program are generally ineligible for Federal Pell Grant funding

Short-term programs of less than 15 instructional weeks in length are now eligible for students to receive Federal Pell Grants

Currently there are no qualifying short-term programs at the U

Federal Pell Grant – Eligibility for students with full COA aid

Federal Pell Grants have long been considered an entitlement; that is, if a student is eligible for the Pell Grant, the full amount of eligibility must be paid to the student

When a student receives an overaward (defined as the case in which a student receives total aid from all sources in excess of their Cost of Attendance (COA)), the Pell Grant must not be reduced; rather, other aid is reduced to resolve the overaward, and in some very limited situations the overaward is allowed.

Students who receive grants or scholarships from non-federal sources covering their entire COA are ineligible to receive a Federal Pell Grant, even if otherwise eligible

Additional guidance is needed to clarify how these new guidelines will be administered

FAFSA data elements and Need Analysis

Family farm and family-owned small business net asset values must be reported on FAFSA and included in need analysis calculations

Foreign income excluded from Adjusted Gross Income (AGI) in need analysis, particularly when affecting Federal Pell Grant eligibility

Regardless of Student Aid Index (SAI) calculation (from need analysis formula), students could be determined as eligible for a minimum or maximum Federal Pell Grant

Exempts net asset value of a family farm and/or family-owned small business from being reported on the FAFSA or included in the need analysis calculations

Foreign income must be included in the AGI in need analysis and a financial aid administrator can no longer exclude it when a reported foreign income prevented a student from being eligible for a Federal Pell Grant

If a student’s SAI is more than twice the amount of the maximum Pell Grant award, the student is not eligible for a Federal Pell Grant regardless of any need analysis calculations or other indications of such eligibility

Institutional Accountability

No such measure currently exists

New accountability measure that would cause an academic program to lose Federal Direct Student Loan eligibility if its graduates fail the “low earnings outcomes" measure 2 out of 3 years

Additional guidance is needed to clarify how these new guidelines will be administered

Federal Student Loan Repayment

There were multiple provisions related to student loan repayment, including loan repayment options and loan forgiveness programs. The U.S. Department of Education (a) issued high-level guidance on some issues in Dear Colleague Letter GEN-25-04 (published on 07/18/2025) and (b) announced on 07/25/2025 intent to hold negotiated rulemaking to develop regulations around many of the components in the Reconciliation Bill. Until more information is available, the following topical summary is a guide to the changes made by the Reconciliation Bill (some of the descriptions below are from a summary prepared by the National Association of Student Financial Aid Administrators); all references to ‘loans’ and ‘borrowers’ below are to the federal student loan programs:

Deferment of loan repayment options – the bill ends the economic hardship deferment and the unemployment deferment; borrowers with federal student loans made on or before 07/01/2027 are still able to use these two deferment options under the current rules; once all of a borrower’s loans made prior to 07/01/2027 are paid in full, these options will cease to exist

Forbearance of loan repayment – the bill changes forbearance for any federal student loans made on or after 07/01/2027 such that these loans are eligible for forbearance for up to nine months maximum in any two-year period. Current rules allow for a forbearance up to 12 months at a time, with a cumulative limit of three years.

Loan rehabilitation – the bill allows borrowers to rehabilitate a defaulted loan twice, as opposed to once under current/existing rules; the minimum rehabilitation payment for Federal Direct Loans changes to $10

Standard repayment plan (SRP) – the bill creates a new standard plan with four fixed terms of 10, 15, 20, or 25 years based on the amount borrowed (or outstanding balance if in repayment)

New income-based repayment plan (RAP) – the bill creates a new income-based repayment plan called the Repayment Assistance Plan (RAP) in which the monthly payment is one to ten percent of income based on the borrower’s Adjusted Gross Income with reductions to the base payment for each dependent the borrower has; there is a $10 minimum monthly payment and no cap on monthly payment amount, and a 30-year repayment period; this change eliminates negative amortization

New borrowers entering repayment – new loans made on or after 07/01/2026 can be repaid using only two plans—a new standard repayment plan (SRP) or the new income-based repayment plan (RAP); a borrower with such new loans who does not select a plan will be assigned to the SRP; note that all loans must be paid under the same repayment plan, thus, borrowers with loans made before 07/01/2026 who take out additional loans on or after this date will only have RAP and SRP as options

Current borrowers entering or in repayment – borrowers with no new loans made on or after 07/01/2026 are eligible to enroll in the current Standard, Graduated, Extended, or existing Income-Based (IBR) repayment plans, and they may also opt into the new RAP; current borrowers may also switch between, enter or remain on existing income-driven repayment plans until 07/01/2028

Existing Income-Based Repayment (IBR) plan – the bill removes the requirement for borrowers in the existing IBR plan to demonstrate a partial financial hardship; the bill retains cancellation of balances of loans repaid under IBR at 25 years (or 20 years for new borrowers)

Repayment options for Consolidation loans – Consolidation loans made on or after July 1, 2026 are only eligible for the RAP or SRP; there are several additional provisions applying to Consolidation loans in which decisions or actions must be made prior to 07/01/2028 and if not, then all eligible loans will be automatically moved to RAP and any loans not eligible for RAP will be moved to IBR; if you are or will be considering consolidating your federal student loans, be sure to consult with your loan servicer(s) regarding options
Repayment options for ParentPLUS loans – all new ParentPLUS loans made on or after 07/01/2026 must be repaid under the SRP and are not eligible for RAP; should a borrower choose RAP for an ineligible loan such as ParentPLUS, they must repay the ineligible loans separately (for borrowers who had borrowed a ParentPLUS loan prior to 07/01/2026 and subsequently borrowed from the program on or after 07/01/2026, repayment must be under the same repayment plan which will be SRP)

University Office of Scholarships & Financial Aid

Academic Affairs

Reconciliation Bill of 2025