On July 4, 2025, President Donald Trump signed the One Big Beautiful Bill Act, which would change policies on federal financial aid given to students. A week later, Central Michigan University President Neil MacKinnon emailed all students and staff about what these changes would be.

These changes will not take effect until July of next year.

They include:

Elimination of federal Grad PLUS loans

A $100,000 lifetime borrowing cap on federal direct unsubsidized loans for graduate students

A $200,000 lifetime borrowing cap on federal direct unsubsidized loans for students in professional degree programs

Parent PLUS loans are now capped at $20,000 per student per year. There used to be no cap

A $257,000 lifetime borrowing limit on all federal student loans outside of Parent PLUS loans

Requires institutions to allocate money to students based on their enrollment status. For example, students who are enrolled below the full-time amount will receive loan amounts based on a percentage of the full-time enrollment status

Pell Grants will no longer be available for those receiving full scholarships

Sarah Kasabian-Larson, the director of scholarships and financial aid at CMU, said that this does not necessarily impact the Free Application for Federal Student Aid (FAFSA), but it will impact eligibility for federal loans. A lot of these changes, she said, were still up in the air.

Many of these changes are being discussed on the federal level about how financial aid administrators should administer laws, and what regulations still need to be placed.

“We’re waiting on what it all means, and how this is going to impact us to help our students understand the impact,” she said. “We have the laws … but we don’t have how we’re going to make this happen or how we’re going to administer that. As soon as we do, we’ll be sharing that with students so they can start preparing because there are quite a bit of changes here.”

Here’s what it all means:

Elimination of federal Grad PLUS loans

Graduate students currently have the ability to borrow up to $20,000 in unsubsidized loans, or loans given to students that are not based on financial need. On top of this, students could borrow a Grad PLUS loan that could cover the cost of whatever money is left if the unsubsidized loans did not cover everything. Those PLUS loans have been eliminated.

Kasabian-Larson said those who are using these federal direct loans before the policy change will not be impacted by these changes. New graduate students will be impacted.

“Now, that doesn’t mean they don’t have options,” she said. “They can look into other options for covering further out-of-pocket costs. If the unsub loan is not enough, they can do a private loan.”

Borrowing cap for students in professional degree programs and graduate students

Students in professional degree programs, or programs designed to prepare someone for a particular profession, will now have a lifetime borrowing cap of $200,000. That cap used to be $224,000.

Once able to borrow up to $138,500 in federal direct unsubsidized loans, graduate students now have a lifetime borrowing cap of $100,000.

Parent Plus Loan

Similar to the Grad PLUS loans, these are additional federal direct loans taken out to cover the cost of whatever is left. Outside of whatever financial aid their child is given, parents can borrow up to their child’s cost of attendance, minus their financial aid.

There was no cap on this loan, but now, the cap will be $20,000.

“That doesn’t impact as many students because our cost of attendance is not that high, and then students are receiving other aid,” Kasabian-Larson said.

Sets limits for half-time students

Half-time students were once able to utilize federal direct loans, either subsidized or unsubsidized. Now, half-time students will receive an annual limit based on the cost of attendance and other aid, Kasabian-Larson said.

Pell Grants

Kasabian-Larson said Pell Grants will not be available for those receiving a full scholarship.

“This is only really applicable to an athlete,” she said. “If they’re receiving a full scholarship through athletics, they could receive the Pell Grant above and beyond.”

She said this is a rare case.

Jennifer Schisa, the interim director of graduate studies, said that it is hard to predict the impacts of these changes because details are still unknown. Despite this, she says some graduate programs at the university are concerned that enrollment will drop.

“Many of us at CMU are concerned about how the changes in federal policy will impact the ability of graduate students to pay for their education,” she said. “Because fewer federal loans will be available to graduate students, many students will need to apply for private loans that sometimes come with higher interest rates, and some students will not be able to pay for a graduate certificate or degree.”