Undergraduate Students: Federal Updates

For current and prospective undergraduate students, here are some points to consider about the impacts of the H.R.1 Bill on your future financial aid planning.

What should I know about undergraduate loan changes under H.R.1? 

There are three critical areas of change under the H.R.1 Bill that impact undergraduate students. These changes are covered in-depth on the Federal Updates page. For details specific to undergraduate students, read the following sections.

Your course enrollment affects your financial aid. The amount of student loans offered in your financial aid package will be dependent on the amount of units in your course load. Read Enrollment-based loan limits below for details.

New lifetime borrowing cap for federal student loans. Also, borrowing caps for Parent PLUS loans. Note: The law does not include any changes to undergraduate federal student loan limits and maintains the current limits for annual and aggregate borrowing. Read Loan limits and borrowing cap below for details.

• Pell Grants are changing. Under the H.R.1 Bill, Pell Grants remain available for current and prospective undergraduate students, with some changes. Read How are Pell Grants affected by H.R.1 below for details.

Repayment plans are changing. Read about the available repayment plans and legacy provisions for students who borrowed prior to July 1, 2026. You will want to periodically check your repayment plans. Read Loan repayment plan changes below for details.

Enrollment-based loan limits

Beginning the 2026–2027 academic year, annual federal student loan amounts will be determined by a student’s level of enrollment (the number of units you complete). This policy is referred to as the Schedule of Reduction for Loans.

Schedule of Reduction for Loans (SOR): For all students at any level of higher education, annual federal student loan amounts will be based on your unit load for the entire academic year. All federal loans for student borrowers will be prorated for students enrolled less than full-time; Parent PLUS loan amounts are not affected by the SOR.

How is enrollment level determined? Your level of enrollment is based on your units for the entire academic year. For UC Berkeley, your annual unit load is determined by fall and spring semester enrollment.

What is considered full-time enrollment under the new law? Full-time enrollment for financial aid purposes is defined for most undergraduate students as 24 units during the academic year, or 12 units per semester. 

How do enrollment limits impact students enrolled part-time? For student borrowers who are enrolled less than full time, your federal student loan amounts will be reduced, and you will only be able to borrow loan amounts in direct proportion (prorated) to your unit load.

What is the minimum enrollment level for federal student loans? To qualify for prorated federal student loans, there is a minimum half-time enrollment requirement, which for most students is 6 units per semester. 

What about summer enrollment? Enrolling in classes the summer following an academic year can also count to meet the 24-unit full-time requirement. 

How are Pell Grants affected by enrollment limits? Read How are Pell Grants affected by H.R.1 below. Please note that dropping classes after the add/drop deadline will result in a reduced (prorated) federal student loan.

Enroll full time, and stay enrolled full time: The best way to ensure your maximum amount of federal loan eligibility is to enroll full time, and stay enrolled full time. Read additional information about enrollment impacts and answers to commonly asked questions on our Federal Updates page.

Loan limits and borrowing cap

There is a new lifetime borrowing cap for all federal student loans and a new loan limit for Parent PLUS loans.

Lifetime borrowing cap for federal loans

All students will have a lifetime borrowing cap of $257,500 on federal student loans. The cap excludes Parent PLUS loan amounts; however, the law includes new limits to Parent PLUS loans (see below).

Note: The H.R.1 Bill maintains the current limits for annual and aggregate borrowing for undergraduate federal student loans. 

• Annual loan limit is the maximum loan amount you can borrow each academic year. 
• Aggregate loan limit is the maximum amount of unpaid principal balance (minus any capitalized interest) that you can have outstanding at any point in time on all of your federal student loans.
• Lifetime borrowing cap refers to the total cumulative amount a student can borrow across all educational levels combined over their entire life (undergraduate, graduate, and professional school).

For a list of current student loan limits, read Federal Student Aid Loan Limits.

New limits on Parent PLUS loans 

New Parent PLUS borrowers are subject to firm loan limits. These new annual and aggregate caps on Parent PLUS loans will limit the amount of federal loans that qualifying parents can take out to help pay for their child’s education. 

Parent PLUS loan limits:

• Annual Cap: $20,000 per year per dependent student
• Lifetime Cap: $65,000 aggregate limit per dependent student (without regard to amounts forgiven, repaid, canceled, or discharged)

Note: Families borrowing the annual maximum will reach the lifetime limit during their fourth year, leaving only $5,000 in remaining eligibility. Explore other financing options early if needed.

Legacy provisions for previous loan eligibility 

Legacy provisions allow certain students who were already using federal loans before the new regulations took effect to maintain their previous loan eligibility. Legacy provisions only apply for borrowers who received a Direct Loan, or whose parent received a Direct PLUS loan on their behalf, for their current program of study before July 1, 2026. These provisions generally last for up to three additional academic years or until the end of the program, whichever is sooner.

How are Pell Grants affected by H.R.1? 

Under the H.R.1 Bill, Pell Grants remain available for current and prospective undergraduate students, with some changes as summarized below. Some students who were previously eligible for Pell Grants may not be eligible in the 2026–27 academic year and beyond.

Pell Grants have new limits based on SAI: As of July 1, 2026, students will not be able to receive Pell Grants if their Student Aid Index (SAI) exceeds twice the maximum Pell Grant award. Your maximum Pell Grant award depends on your SAI, enrollment status (full-time vs. part-time), and the overall cost of attendance. This change will have the most impact on students and families with low incomes, but significant assets.

Inclusion of foreign income in Pell determinations: Foreign income is now included in the adjusted gross income (AGI) used to calculate Pell Grant eligibility on the FAFSA. This calculation will be automatic when your FAFSA is processed. This change will have the most impact on students and families with foreign income who received a Pell Grant from 2024–26.

Note: Pell Grant awards have always been prorated for reduced course enrollment, and are evaluated each term. Students not enrolled full-time are only eligible for a partial (prorated) portion of their maximum Pell Grant. Students enrolled on less than a half-time basis will maintain eligibility for prorated funds based on their enrollment intensity (course load).

Change in eligibility for Pell Grants: If you receive non-federal grants or scholarships covering your entire cost of attendance (COA), according to the new law, you would be ineligible to receive a Pell Grant, even if otherwise eligible for the program. This change would have the most impact on students with full-ride scholarships and students whose institutional, state, and/or private aid meet or exceed full COA. The Financial Aid and Scholarships team is currently working to minimize the impact of this part of the law so that our students continue to receive the Pell Grants for which they are eligible.