Federal Aid is Changing Under the One Big Beautiful Bill Act

Who Is Affected by the Changes?

Undergraduate Students — An undergraduate student is someone who:

• Is enrolled in a program that leads to a first associate or bachelor’s degree, and
• Has not previously earned a bachelor’s or professional degree

Why This Matters

• This classification determines the type of federal loans and borrowing limits available.
• Undergraduate students fall under the new OBBBA rules for undergraduates, including loan caps and enrollment-based eligibility.

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Post-Baccalaureate Certification Students — A post-baccalaureate certification student is someone who:

• Has already earned a bachelor’s degree, and
• Is enrolled in a state-required teacher certification program that does not lead to a graduate degree

These programs are designed to help students earn a professional teaching license and do not include post-baccalaureate or graduate certificates taken for professional development.

Why This Matters Under OBBBA

• Although these students already hold a bachelor’s degree, they are considered fifth-year undergraduates for financial aid purposes— even if they are enrolled through a graduate or continuing education division.
• This is a federal rule, not something specific to MU and has not changed under OBBBA, however,
• It remains important because of changes to loan limits and eligibility.

Under OBBBA, this classification should refer to information regarding undergraduate loan limits and aid programs.

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Graduate Students — A graduate student is someone who:

• Has already earned a bachelor’s degree, and
• Is enrolled in a program that leads to a graduate-level degree, such as:
  • A master’s degree (e.g., MA, MS, MBA)
  • A doctoral degree (e.g., PhD, EdD)

These programs are considered standard graduate programs and are not classified as professional degree programs for financial aid purposes.

Why This Matters Under OBBBA

• Graduate students are subject to specific federal loan types and borrowing limits changes under OBBBA.

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Professional Degree Students — A professional degree student is someone who:

• Has already earned a bachelor’s degree, and
• Is enrolled in a graduate-level program that:
  • Leads to a licensed profession, and
  • Falls within a list of federally recognized professional fields
  • Examples of professional degree programs include:
    • Medicine (MD, DO)
    • Law (JD)
    • Dentistry (DDS, DMD)
    • Pharmacy (PharmD)
    • Veterinary Medicine (DVM)
    • Optometry (OD)
    • Theology (MDiv)
    • Clinical Psychology (PsyD, some PhDs)

Why This Matters Under OBBBA

• Students in recognized professional programs fall under different OBBBA rules than standard graduate students.
• Classification depends on federal definitions tied to program type, not just career outcomes.

Note: 

• Many programs that people call “professional” — like nursing, social work, or education — are not treated as “professional programs” under federal loan rules. They’re considered graduate programs, even if they prepare them for and lead to professional careers.
• Millersville University does not currently offer programs that would fall under the “professional degree” student type for aid purposes.

 

Refer to the chart below for a quick glance comparison chart for Student Types

 

Student Type Comparison Chart

Students with high Student Aid Index (SAI) scores are no longer eligible for Pell Grants.

• Under the updated rules, Pell Grant eligibility is now more tightly aligned with financial need, as measured by the Student Aid Index. Students with higher SAIs — even if they previously qualified — may no longer receive Pell funding.

Workforce Pell Grants may become available.

• The Department of Education plans to introduce new Pell Grant options for short-term, non-degree programs focused on workforce training. Details on eligible programs are still being finalized.

Aid packages that fully cover a student’s cost of attendance may reduce or eliminate Pell eligibility.

• If a student receives scholarships, grants, or other forms of financial aid that meet or exceed the full cost of attendance, they may not qualify for Pell Grants, even if they have a low SAI.

Borrowing Limits and Loan Access

Total borrowing across all federal loans will now be limited to about $257,500 per person, including combined undergraduate and graduate loans. 

These limits are set to take effect on July 1, 2026, and are designed to reduce the overall cost of higher education —limiting the amount of student debt that borrowers may accumulate. 

Undergraduate & Post-baccalaureate Certification Students 

• Aggregate Lifetime Loan Limits remain the same:
  • $57,500 for independent students
  • $31,000 for dependent students
• Annual Loan Limits are subject to new rules:
  • Students are eligible to receive up to their annual loan limits (based on grade level and remaining aggregate eligibility); however,
  • Students taking less than full-time credits (12+ credits) will have their annual loan amounts limited. They will be prorated based on the actual credit hours  a student is enrolled (which could result in a reduction during that semester and annually overall).

An undergraduate student is someone who:

• Is enrolled in a program of study that leads to a first associate or bachelor’s degree, or a program below the baccalaureate level (e.g., associate, diploma, certificate).

• Has not yet earned a bachelor’s or first professional degree.

So a student working on their first bachelor’s, or on an associate degree, is an undergraduate. A student who already has a bachelor’s is generally not an undergraduate, with one key exception below.

Post‑baccalaureate certification student

A post‑baccalaureate certification student is someone who:

• Has already earned a bachelor’s degree, and

• Is enrolled in a teacher certification or professional credential program that:

  • The state requires for initial teacher certification or licensure, and

  • Does not itself lead to a graduate degree (it’s a non‑degree credential program).

For federal aid purposes, that student is often treated as undergraduate for program eligibility, even though they already hold a bachelor’s, because the program is at the undergraduate/credential level rather than leading to a graduate degree. 

Graduate Degree Students

A graduate student is a student who has already earned a bachelor’s degree and is now enrolled in a program leading to a more advanced degree, such as a master’s or doctoral degree. 

• Aggregate Lifetime Loan Limits have changed:
  • Previous Limit: $138,500 (included federal loans taken out during undergraduate studies)
  • Updated Limit: $100,000 (does not include loans taken out during undergraduate studies)
  • $157,500 is now the Max Combined between undergraduate and graduate programs
  • Some professional programs may be eligible for up to an additional $100,000 in their lifetime (still not to exceed the new $257,500 limit across all loans.

Professional Degree Students

A professional program is a specific type of advanced degree that prepares you to begin practice in a licensed profession and falls in one of a small set of designated fields.

Under OBBBA implementation, ED treats professional only programs with CIP codes in the same intermediate group as (examples):​

• Medicine / Osteopathic medicine (MD, DO)
• Dentistry (DDS, DMD)
• Pharmacy (PharmD)
• Veterinary medicine (DVM)
• Optometry (OD)
• Podiatry (DPM, DP, PodD)
• Chiropractic (DC, DCM)
• Law (JD, LLB)
• Theology (MDiv, MHL)
• Clinical psychology (PsyD, some PhD)

Anything outside that narrow list (e.g., most master’s degrees, post-baccalaureate certifications, PhD programs in non‑clinical fields, nursing, social work, PT, SLP, many EdD programs) are treated as graduate (non‑professional) for loan‑limit purposes, even if in common language it feels “professional.”​

• Aggregate Lifetime Loan Limts have changed:
  • Previous Limit: $138,500 (included federal loans taken out during undergraduate studies)
  • Updated Limit: $100,000 (does not include loans taken out during undergraduate studies)
  • $157,500 is now the Max Combined between undergraduate and graduate programs
  • Some professional programs may be eligible for up to an additional $100,000 in their lifetime (still not to exceed the new $257,500 limit across all loans.