The One Big Beautiful Bill Act & Important Updates
to Federal Financial Aid
On July 4, 2025, President Donald Trump enacted the One Big Beautiful Bill Act, introducing significant changes to higher education policy including changes to federal student financial aid programs effective July 1, 2026.
Please note: The information on this page is subject to change as additional guidance becomes available. The updates highlighted here reflect those most relevant to Dakota College at Bottineau students but do not represent a comprehensive list of all changes. For the full legislative text, visit Congress.gov.
Federal Loan Reduction/Proration
What has changed?
- Federal loans are now treated as annual loans based on your total enrollment for the academic year (24 credits).
- Schools must reduce loan amounts based on the percentage of credits you are enrolled in.
- Effective for loans disbursed starting in the 2026–2027 academic year.
What does this mean?
- Full-time enrollment is 12 or more credits per semester. If you take fewer than 12 credits, your federal loan amount will be reduced.
- If your enrollment changes during the year, your remaining loan funds may be adjusted in the next semester.
- Students who are enrolled in less than 24 credits Fall/Spring combined will see a reduced loan amount in their second semester.
Federal Pell Grant Eligibility
What has changed?
- Students who receive grants or scholarships from non-federal sources that covers their full cost of attendance are ineligible to receive a Pell Grant.
- Students are no longer eligible for Pell Grant when a student’s SAI equals or exceeds twice the maximum Pell award.
What does this mean?
- The maximum Pell grant for the 2026-2027 academic year is currently set at $7,395.
- Students with an SAI greater than or equal to 14,790 are ineligible.
Parent PLUS Loans
What has changed?
- Eligible parents may borrow a maximum of $20,000 per aid year per dependent student.
- Per student aggregate loan limit of $65,000.
Student Loan Repayment
Repayment Plans for New Borrowers (after July 1, 2026)
What has changed?
- Borrowers who borrow new loans on or after July 1, 2026, will have 2 repayment plan options:
- The Standard Repayment Plan or the Repayment Assistance Plan (RAP).
- If no plan is chosen, borrowers will be placed in the Standard Repayment Plan automatically.
What does this mean?
- All loans must be repaid under the same repayment plan.
- Borrowers with loans borrowed prior to July 1, 2026, who borrow again after that date, will be limited to the new Standard Repayment Plan or RAP.
- Standard Repayment Plans have fixed payments that can span 10-25 years.
- RAP is income-based.
Repayment Plans for Current Borrowers (prior to July 1, 2026)
What has changed?
- Borrowers who do not take out new loans on or after July 1, 2026, may continue using current repayment plans.
- Students may remain in or switch between existing income-driven plans through July 1, 2028.
What does this mean?
- Borrowers currently enrolled in the Income Contingent Repayment (ICR), Pay As You Earn (PAYE), or Savings on a Valuable Education (SAVE) plan must choose a new repayment plan (either Standard or RAP) by July 1, 2028.
- If no choice is made, borrowers will automatically be placed in RAP.
Loan Deferment
- Economic hardships and unemployment deferments will no longer be available.
- Effective July 1, 2027.
What does this mean?
- Borrowers with loans borrowed on or before July 1, 2027, may continue to use these deferment options under the current rules.
- Once those loans are paid off, these deferments will no longer be available.