The One Big Beautiful Bill (OB3) made significant changes to federal student aid programs. This page explains new rules for student and parent borrowing, FAFSA identity verification, Pell Grants, and other financial aid provisions. Most changes take effect July 1, 2026. Information will be updated as additional federal guidance becomes available.
What Students and Parents Need to Know
Federal aid is now tied to your future earning potential. This means it’s more important than ever to pick a career path early and finish your program in two years to keep your federal aid for a bachelor’s or higher degree. The new rules for student and parent loan limits were signed into law with the One Big Beautiful Bill (OB3/H.R. 1) in July 2025. Most changes will begin on Wednesday, July 1, 2026.
What’s Changing?
The OB3 law brings big changes to federal student loans, borrowing limits, and repayment options. Some parts of the law need more federal rules before they take effect. The U.S. Department of Education is still working on these rules, and we will update this page as new information becomes available. For the latest updates, visit Federal Student Aid’s OB3 Updates page.
Key Rule Changes and Comparison Charts
Student Borrowing
Before July 1, 2026, students could borrow federal loans as long as they stayed enrolled. After July 1, 2026, how long you can borrow depends on your program’s expected length. For example, a two-year program gives you about two years of borrowing, even if you take longer to finish.
This is especially important for part-time students. If you take 9 units per term instead of 15, a two-year program could take four years to finish. However, your loans will still end after two years.
Also, new borrowers who are enrolled in fewer than 12 units can only borrow based on the number of units they take, similar to how Pell Grants work.
| Loan Type | Note | Rules Before July 1, 2026 | Rules After July 1, 2026 |
|---|---|---|---|
| Loan eligibility duration | Major change | Students could borrow for as long as they remained enrolled in 6 or more units and met all other criteria. | Loan eligibility tied to program length. A two-year program gets two years of loans even if you have not completed your program. |
| Part-time loan amounts | Major change | A part-time student could borrow the same amount as a full-time student. | Loan amounts prorated based on unit load. Half-time students get roughly half the amount. |
| Undergraduate loans (subsidized and unsubsidized) | Little to no change | $5,500 to $7,500 per year depending on year in school. $31,000 lifetime cap for dependent undergrads. | Annual and lifetime limits unchanged |
| Graduate student loans | Major change | $20,500 per year. $138,000 aggregate undergrad. Plus unlimited Grad PLUS up to cost of attendance | $20,500 per year. New $100,000 lifetime cap on graduate borrowing. Grad PLUS eliminated. This doesn’t affect most Hartnell College students directly, but students with transfer and graduate school goals need to know before they get there. |
| Professional student loans (medicine, law, pharmacy) | Major change | $20,500 per year. $138,500 aggregate. Plus unlimited Grad PLUS up to cost of attendance. | $50,000 per year. $200,000 lifetime cap. Grad PLUS eliminated. |
| Lifetime federal loan cap (all student borrowing combined) | New Rule | No single unified lifetime cap across all federal student loan types. | $257,500 total across undergraduate, graduate, and professional loans combined. |
Parent Borrowing
Parents can now borrow up to $20,000 each year and a total of $65,000 per child. Before, there was no limit. Non-California residents are charged differently, so check the California Residency Requirements. If you planned to use a Parent PLUS loan for extra costs, remember that annual loan limits now apply. You can no longer borrow up to the full cost of attendance.
| Loan Type | Note | Rules Before July 1, 2026 | Rules After July 1, 2026 |
|---|---|---|---|
| Parent PLUS loans | Major change | Parents could borrow up to the full cost of attendance minus other aid, every year. No annual cap. No lifetime cap. | $20,000 per year per child. $65,000 lifetime cap per child. Cap follows the student, not the school. |
FAFSA
Starting April 26, 2026, the federal government added a new step to the Free Application for Federal Student Aid (FAFSA) process to help protect students from identity fraud. From that date on, some applications will be randomly chosen for an identity check.
If your application is chosen for an identity check, it doesn’t mean you did anything wrong. These checks are only meant to improve security and prevent fraud.
| Update | Note | Rules Before July 1, 2026 | Rules After July 1, 2026 |
|---|---|---|---|
| Identity verification | New Rule | Standard FAFSA submission. Verification only when flagged, typically through paperwork. |
Real-time identity screening tiers applicants into four risk levels. High-risk applicants must complete live camera verification on a phone or tablet. The California Dream Act Application (CADAA) will not be impacted. |
How will the identity checks work?
If your application is selected, you’ll get a request from Federal Student Aid (FSA) to verify your identity. You’ll need to do a quick live camera check on your phone or tablet and show a valid government-issued ID. Most people will not be selected for this check.
If you receive a verification request, reply as soon as possible, as waiting could delay your financial aid. If you don’t have a phone or tablet with a camera, contact the Financial Aid Office to talk about your options.
What should you do now?
If you’ve already submitted your 2026-2027 FAFSA, keep an eye on your email for any verification requests and respond quickly.
Pell Grants
Short-term career training programs will soon be eligible for Pell funding. Hartnell’s programs still need to complete a federal approval process, which can take a year or more. We’ll let you know when specific programs qualify. For now, just know that it’s coming, so stay tuned.
| Loan Type | Note | Rules Before July 1, 2026 | Rules After July 1, 2026 |
|---|---|---|---|
| Pell eligibility | Moderate Change | Available based on financial need (Student Aid index). Less-than-half-time students qualified for partial Pell. |
Students with non-federal aid covering full cost of attendance no longer qualify. New high-asset and foreign income exclusions. |
| Workforce Pell (short-term programs) | New Program (Not yet available at Hartnell College) | Pell could not be awarded for programs under 16 weeks. |
Pell available for approved workforce programs 8 to 15 weeks, 150 to 600 clock hours. Programs must meet federal completion and job placement requirements. Approval takes a year or more. |
Protection for Existing Borrowers
Students who were enrolled and borrowing before July 1, 2026, can keep their old loan limits for up to three years or until they finish their program, whichever happens first. This is called the legacy provision. You lose this protection if you withdraw, transfer to another program, or stay enrolled longer than your program’s expected length.
| Loan Type | Note | Rules Before July 1, 2026 | Rules After July 1, 2026 |
|---|---|---|---|
| Legacy provision (interim exception) | New Rule | Not applicable. The current rules are simply the rules. |
Students enrolled with at least one federal loan disbursed before July 1, 2026, can continue under old rules for up to 3 years or until program completion. Protection lost if student withdraws, transfers programs, or exceeds program length. |
Degree and Certificate Programs Will Now Be Held to an Earnings Accountability Standard
If a degree or certificate program does not lead to higher earnings than a typical high school graduate without a degree or certificate in that field, the new federal laws may not provide aid for those majors. The law now compares these earnings to state and national averages.
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