Federal financial aid changes for 2026–27

Federal financial aid rules are changing for the 2026–27 academic year. These changes may affect undergraduate students, graduate students, parent borrowers, and borrowers who are already repaying federal loans.

This page summarizes Fort Lewis College’s current understanding of federal financial aid changes as of June 2026. Federal guidance may change. Contact the Office of Financial Aid before making decisions about borrowing, repayment, or enrollment plans.

Most changes begin July 1, 2026.

What is changing?

The One Big Beautiful Bill Act was signed into law on July 4, 2025. It makes significant changes to federal financial aid programs, including loan limits, repayment options, and eligibility requirements.

The biggest changes include:

  • New borrowing limits for Parent PLUS loans
  • The end of Graduate PLUS loans for many graduate students beginning July 1, 2026
  • Reduced federal loan eligibility for part-time students
  • Updated Pell Grant eligibility rules
  • New and updated federal student loan repayment plan options
  • New federal program accountability rules beginning in future years

Choose your situation

Use the sections below to find the information that applies to you. 

Current undergraduate students continuing in 2026–27
New undergraduate students starting in Fall 2026 or later
Current graduate students continuing in 2026–27
New graduate students starting in Fall 2026 or later
Borrowers currently in school or in deferment
Borrowers currently repaying federal loans
Parent PLUS borrowers

Updated tax benefits 

Some federal tax benefits related to education and student loans are also changing.

Employer-provided educational assistance

Employer-provided educational assistance under Section 127 allows up to $5,250 per year in tax-free benefits. Beginning in 2026, this amount will increase with inflation.

This benefit may be used for tuition or student loan repayment if your employer offers it.

Other tax changes

Other notable tax changes include:

  • Student loan interest deduction of up to $2,500, subject to income limits
  • Loan discharge due to death or disability made permanently tax-free

Check with a tax professional for guidance about your specific situation.

Borrower Defense and Closed School Discharge

Federal rules for borrower defense and closed school discharge claims are changing. Claims may be reviewed under different standards and may have longer processing times. The U.S. Department of Education is expected to issue additional guidance.

Additional Resources

Visit StudentAid.gov for official federal student aid information, including:

  • Federal student loans
  • Understanding student loan repayment
  • Student loan repayment plans
  • Finding your loan servicer
  • Federal versus private loans

Questions? We Are Here to Help.

Office of Financial Aid
Fort Lewis College
finaid_off@fortlewis.edu
970-247-7142

Disclaimer

This page reflects Fort Lewis College's current understanding of enacted legislation, applicable regulations, and guidance issued by the U.S. Department of Education as of June 2026. Federal guidance may change. This page may be updated as new information becomes available.

Always contact the Office of Financial Aid or your loan servicer before making decisions about borrowing, repayment, or enrollment.