Financial Aid Changes

Starting July 1, 2026, federal student loan limits will be prorated based on annual enrollment intensity.

This means students taking fewer credit hours will qualify for reduced loan amounts.

Proration Calculation

• Loan limits will be adjusted based on the annual percentage of full-time enrollment (12 credit hours per term).
• For example: An undergraduate student who is enrolled 6 credit hours in Fall and 6 credit hours in Spring is enrolled 50% each term. Their federal student loans will be prorated to 50% of their annual eligibility. If the student is eligible for $7,500 ($3,750 per term) at full-time for the two semesters combined, then their prorated amount will be reduced to $3,750 ($1,875 per term) to reflect their half-time enrollment.
• Students are still required to be enrolled at least half time (6 credit hours) in a term to borrow any federal direct loan amount.
• Annual loan award limits remain the same for undergraduate students.

Beginning with the 2026–27 award year, several new rules will affect eligibility for the Federal Pell Grant.

SAI Ineligibility Threshold

Students whose SAI is equal to or greater than twice the maximum Pell Grant award will not qualify for Pell Grants.

• For the 2026–2027 academic year, the ineligibility threshold is $14,790.

Scholarship Impact

Students whose total scholarship or waiver aid meets or exceeds their full Cost of Attendance (COA) may no longer be eligible for any Pell Grant amount.

Foreign Earned Income

If a student or parent reports a foreign earned income exclusion, the excluded amount will now be added back to the Adjusted Gross Income (AGI) when determining eligibility.

Asset Reporting Changes

The following assets are now excluded from FAFSA asset reporting:

• Family-owned businesses with 100 or fewer employees

• Family farms where the family lives on the property

Reminder: The Expected Family Contribution (EFC) has been replaced by the Student Aid Index (SAI).

The SAI is used to determine a student’s eligibility for federal financial aid.

Key details:

• The SAI measures a family’s ability to contribute toward education costs.

• Colleges subtract the SAI from the Cost of Attendance (COA) to determine financial need.

• The SAI can be as low as –1,500, allowing additional support for students with the greatest financial need.

Year-Round Pell

Eligible students may receive up to 150% of their scheduled Pell Grant award if they attend an additional academic term (such as summer) within the same school year.

Lifetime Limit

Students may receive Pell Grants for a maximum of 12 semesters (or the equivalent of 6 years).

Award Calculation

If a student does not qualify for the maximum Pell Grant based on federal poverty guidelines, the award is generally calculated by:

1. Subtracting the Student Aid Index (SAI) from the maximum Pell Grant amount

2. Rounding the result to the nearest $5

Beginning July 1, 2026, major changes will occur to federal student loan repayment options under the One Big Beautiful Bill Act (H.R.1).

Termination of Current Repayment Plans

Current income-driven repayment (IDR) plans, including statutory income-based repayment options, will be terminated for new borrowers after July 1, 2026.

New Repayment Options – Two repayment plans will remain available:

1. Standard Repayment Plan

• Fixed monthly payments

• Repayment period of 10–25 years

• Payment amount based on total loan balance

2. Repayment Assistance Plan (RAP)

The new Repayment Assistance Plan (RAP) introduces an income-based repayment model:

• Monthly payments range from 1% to 10% of Adjusted Gross Income (AGI)

• Includes a $50 monthly principal match

• Any unpaid interest may be forgiven

• Remaining loan balance is forgiven after 30 years

These changes apply primarily to:

• Undergraduate borrowers

• Federal Direct Subsidized Loans

• Federal Direct Unsubsidized Loans

Impact for Part-Time Students

Students taking fewer than 12 credit hours (or the equivalent) should expect lower federal loan eligibility due to the prorated limits.

Additional reforms under the One Big Beautiful Bill Act (H.R.1) include:

• Elimination of Graduate PLUS loans for new borrowers (not applicable at JSCC)

• Loan reforms designed to reduce excessive borrowing

• Simplified repayment structures through the Repayment Assistance Plan (RAP)

These federal changes may affect:

• Financial aid eligibility

• Pell Grant amounts

• Student loan borrowing limits

• Repayment options after graduation

Students are strongly encouraged to:

• Complete the Free Application for Federal Student Aid (FAFSA) every year

• Review their financial aid awards carefully

• Contact the Jefferson State Financial Aid Office with any questions