Major changes to federal financial aid went into effect on July 1 that might impact eligibility and borrowing limits for students.
There will be changes to Pell Grants eligibility and limits to direct student loans, Graduate PLUS Loans and Parent PLUS Loans due to the One Big Beautiful Bill Act that was signed into law in July 2025.
“There’s a lot of nuances to these rules that we’re still learning, so we don’t have all the answers,” Assistant Vice Provost for Financial Aid and Scholarship Sheelu Surender said. “… We’re trying to get them implemented in time for August, and now it’s already July, so trying to get all of that in place and making sure that students understand, that’s the challenge for us.”
All Pell Grant eligible students will lose eligibility if their combined aid exceeds the cost of attendance. Previously, Pell Grants could be awarded as long as the student was eligible, regardless of how much aid they were receiving. There is no way to award partial Pell Grants.
“If a student, let’s say, has a bunch of aid, then they have the Pell Grant as well, we will have to reduce their other aid or not give them Pell Grant,” Surender said. “With the Pell Grant, it’s an all or nothing, so it’s not like we can adjust it to keep them within the cost of attendance… What we’re doing is we want to make sure that the students have the most resources that they are eligible for, so we will reduce other things and allow them to keep the full amount of their Pell Grant because it’s more beneficial to them, it’s beneficial to the institution.”
Surender said one of the possibilities the Financial Aid office will look into when a student who is eligible for Pell Grants, but gets more aid than the cost of attendance, is looking at things like credit hours to see if they can increase their cost of attendance from the average. But if there needs to be reduction to keep Pell Grant eligibility, loans will be the first thing reduced.
Students who borrow federal aid will now receive direct student loans based on credit hours. Before these changes, full-time and part-time students could receive the same amount of federal subsidized and unsubsidized loans, but now part-time students will receive a percentage that is based on their credit hours.
“That’s a big challenge, initially, when you first get offered the aid and you apply and you’re only going to be part-time or full-time, you know what that amount is and can utilize that to kind of plan,” Surender said. “The challenge also comes where if you have a student who drops a class… then we have to reduce that amount and essentially pull it back and they’ll be charged for that amount they took out… because according to the government then, they don’t have eligibility for that full amount.”
Surender said this will most likely impact adult learners and first generation students because they are most likely to need to work full time, along with being a student and many of those students rely on the full amount of loans to get through college.
Any new borrower as of July 1, will not be able to receive Graduate PLUS Loans and there will be an annual limit of $20,000 with a $65,000 lifetime cap for Parent PLUS Loans.
“They did enact some legacy provisions,” Surender said. “So if you were already a borrower, then you get to kind of keep some of the options that you had previously and so not all of the limits apply to you.”
A legacy borrower is any student that has borrowed loans prior to July 1, but if a student does not finish their program in the amount of years they’re expected to, they will no longer be considered a legacy borrower and will not be eligible for these exceptions. Also, if a student changes their major, they will not be considered a legacy borrower.
Graduate students are able to borrow unsubsidized loans with a limit of $20,500 and in the past have been able to borrow up to the cost of attendance with Graduate PLUS Loans, but these loans will no longer be available for non-legacy borrowers.
“In programs and at institutions where those costs were significantly higher than at Wichita State, students were borrowing a lot of funds,” Surender said. “So that’s one of the reasons I think the federal government kind of came in with these limits because they felt like student debt was increasing and increasing… While that’s understandable, the all or nothing approach kind of then limits students and kind of makes some challenges for students.”
Parent PLUS Loans will also have different limits for new borrowers. Dependent students were able to borrow up to the cost of attendance, but now there is an annual limit of $20,000 with a lifetime cap of $65,000.
“The math doesn’t add up there,” Surender said. “… We’re encouraging students to plan that, don’t borrow the full $20,000 if you don’t need it, spread that out to $16,500 per year so you have for the four years.”
Students with any questions can make an appointment with the Office of Financial Aid and Scholarship to talk to an advisor.
“Students who are — and I’ve communicated this always across campus — is that if they are facing unusual circumstances, emergencies, come in and talk with an advisor because we set aside emergency funding to help students who may be struggling,” Surender said. “It’s going to be the difference between staying in school or having to leave school.”
