What you should know about the
Working Families Tax Cuts Act

We are tracking potential financial aid impacts and will update this page as guidance becomes available from verified sources, including the U.S. Department of Education.

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The Working Families Tax Cuts Act (formerly called the One Big Beautiful Bill Act) was passed on July 4, 2025, and includes significant changes to federal student aid programs. Most changes are effective beginning July 1, 2026, and will affect most students for the 2026-27 school year. New accelerated graduate students will be affected for Summer Quarter 2026. Final regulations created by the Act were issued by the U.S. Department of Education on May 1 and May 18, 2026.

This page will be updated as we receive additional information from verifiable sources such as the U.S. Department of Education. 

Questions? Contact finaid@ewu.edu or call 509.359.2314.

New Student Loan Limits

Legacy exception: If a student has an active federal student loan of any kind disbursed before July 1, 2026, while enrolled in a qualifying program, the borrower may continue borrowing under previous loan limits for three academic years, until they graduate, or until they reach the published program length, whichever is sooner. Note: Changing programs, taking a leave of absence, or other enrollment changes may affect your ability to be included in the legacy exception.

Undergraduate Loan Limit

NO CHANGE
Annual: up to $12,500 (based on academic level & need)
Lifetime: $57,500

Undergrad FAQs

Graduate Loan Limit:

Annual: $20,500
Lifetime: $100,000

Graduate FAQs

Parent PLUS Loan Limit

Per Student Recipient:
Annual: $20,000
Lifetime: $65,000

Parent Borrower FAQs

Federal Student Loan Program Changes

Beginning July 1, 2026, annual loan limits will be prorated depending on enrollment level, similar to grant funding. This means loan borrowers enrolled less than full-time will only be able to borrow loan amounts in direct proportion to their credit load, with a minimum half-time enrollment requirement.

EWU students enrolled less than full-time (fewer than 12 credits for undergraduate students and fewer than 8 credits for graduate students) will be impacted.

Effective July 1, 2026, the Graduate PLUS Loan Program has been discontinued entirely for all new borrowers. Graduate PLUS Loans currently allow graduate students to borrow up to the Cost of Attendance for their program.

New EWU graduate students, commencing coursework on or after July 1, 2026, will be impacted.

Graduate PLUS Loan Legacy Exception: If a student has an active federal student loan of any kind that was disbursed before July 1, 2026, while enrolled in a qualifying program, the borrower may continue borrowing a Graduate PLUS loan for three academic years, until they graduate, or until they reach the published program length, whichever is sooner. Note: Changing programs, taking a leave of absence, or other enrollment changes may affect your ability to be included in the legacy provision.

The Working Families Tax Cuts Act reduces the number of repayment plan options to a single income-based plan, RAP, and an updated Standard Repayment Plan. These new plans will begin July 1, 2026, for any new loans borrowed after that date. Current borrowers can also choose to switch to one of the new plans. If a current borrower does not take out any new loans after July 1, 2026, and is on the current standard, graduated, or extended repayment plan, they may keep that plan until they pay off their loans. Any borrower on a current income-based repayment (IBR) plan can maintain their current plan or switch between other available plans before July 1, 2028. Any outstanding loans utilizing one of the current IBR plans on July 1, 2028, will be converted to the new Repayment Assistant Plan.

The income-based plan, called the Repayment Assistant Plan (RAP), has varying monthly payments based on the borrower’s and their spouse’s AGI. The rate will be between 1-10% of AGI, but cannot be reduced lower than $10 per month. RAP is a 30-year repayment period, and payments made under this plan can qualify for Public Service Loan Forgiveness. RAP also eliminates negative amortization, so a borrower’s outstanding debt cannot increase even though they make their monthly payments.

The new Standard Repayment Plan is a fixed repayment plan over 10, 15, 20, or 25 years based on the total amount of borrowed loans or outstanding debt when opting into the Standard Repayment Plan. Any new loans borrowed after July 1, 2026, will automatically be put into the Standard Repayment Plan unless they choose another option when entering repayment.

Federal Pell Grant Program Changes

Students meeting or exceeding their full Cost of Attendance with scholarship/waiver aid will not be eligible for any amount of Pell Grant.

Most EWU students will not be impacted.

Students whose Student Aid Index (SAI) is at least two times the current Pell Grant maximum of $7,395 will not be eligible for the Pell Grant. Example: For 2025-26, that would equal an SAI of $14,790.

Most EWU students will not be impacted.

Undergraduate Student FAQs

You will not qualify for a Federal Pell Grant for the 2026–27 academic year if:

  • Your Student Aid Index (SAI) is 14,790 or higher, or
  • Your total non-federal grants and scholarships equal or exceed your total cost of attendance

If neither of these situations applies and you meet all other eligibility requirements, you may still receive a Pell Grant.

The Parent PLUS loan is the only impacted student loan program for undergraduate students.

If your parents previously borrowed a Parent PLUS loan on your behalf, you may qualify for the student loan legacy exception if your parents borrowed a Parent PLUS loan before July 1, 2026, while you were enrolled in your current academic program, and have not reached the program’s length of study or three years, whichever is earlier.

Starting in the 2026–27 academic year, federal student loan eligibility will be based on full-time enrollment for the academic year. If you enroll in, or complete, fewer than 12 credits per term, your loan eligibility may be reduced.

You must still be enrolled at least half-time (6+ credits) to be eligible for a Direct Loan disbursement in a term.

Changing your major usually does not affect your financial aid. However, if you qualify for student loan legacy exceptions and change your credential level, you will lose your legacy status. For example, you complete a bachelor’s degree and start a graduate program.

Graduate Student FAQs

You qualify for legacy exceptions if you were enrolled in your current program and received a federal student loan for that program before July 1, 2026.

If you qualify, you can continue borrowing Graduate PLUS Loans and are not subject to the new loan limits for graduate students.

Possibly. Some summer 2026 classes begin before July 1, 2026, which may allow students to borrow and receive loan funds before that date. New EWU accelerated graduate students, or those starting a new degree, will not qualify for legacy as program aid disbursement begins after July 1, 2026.

No. If you qualify for legacy exceptions, you cannot choose to opt out and borrow under the new rules. As long as you maintain your legacy status, your financial aid will follow the legacy rules.

If you qualify, you can continue to borrow under legacy exceptions for up to three years (through the end of the 2028-29 academic year) or until you reach your program length—whichever comes first.

You will lose your legacy status if you:

  • Take a break from enrollment (excluding summer term), or
  • Change your degree or certificate program on or after July 1, 2026, or
  • Reach your calculated program length

EWU does not offer any programs classified by the U.S. Department of Education as a Professional Program.

Graduate students can borrow up to $20,500 in Federal Direct Unsubsidized Loans per academic year as a full-time student (8 or more credits each term). If you are enrolled less than full-time, your loan amount will be reduced based on your enrollment level.

If you qualify for legacy exceptions, your aggregate or lifetime limit is $138,500 in all Federal Direct Subsidized and/or Unsubsidized Loans. This limit includes loans borrowed as an undergraduate student.

If you do not qualify for legacy exceptions, your aggregate limit is $100,000 in Federal Direct Unsubsidized Loans. This does not include any loans borrowed as an undergraduate student.

There is an additional overall lifetime limit of $257,500 for any federal student loans you have borrowed at any degree level, including Graduate PLUS loans, for those who do not qualify for the legacy exception.

Starting in the 2026–27 academic year, federal student loan eligibility will be based on full-time enrollment for the academic year. If you enroll in, or complete, fewer than 8 credits per term, your loan eligibility may be reduced.

You must still be enrolled at least half-time (4+ credits) to be eligible for a Direct Loan disbursement in a term.

If you qualify for legacy exceptions, you may borrow up to your estimated cost of attendance, minus other aid received. However, if you are enrolled less than full-time (fewer than 8 credits), your PLUS loans will also be adjusted based on your enrollment.

If you do not qualify for legacy exceptions, you are not eligible to borrow Graduate PLUS Loans.

If you are not eligible for Graduate PLUS Loans, you may still qualify to borrow:

  • Up to $20,500 per year in Federal Direct Unsubsidized Loans (may vary based on lifetime limit), and/or
  • Private alternative student loans up to your total estimated Cost of Attendance, minus other aid received. Learn more: Alternative Private Loans.

Parent Borrower FAQs

If you qualify for legacy provisions, your parent can borrow up to your total estimated cost of attendance, minus other aid you are receiving.

If you do not qualify for legacy provisions, your parent can borrow:

  • Up to $20,000 per academic year
  • Up to $65,000 total for your program

These limits are specific to you as the student, not per parent.

If a parent borrows a Parent PLUS Loan or reconsolidation loan (that includes PLUS loans) on or after July 1, 2026, all outstanding Parent PLUS Loans must be repaid under a new tiered repayment plan. Additionally, all Parent PLUS Loans would be ineligible for Public Service Loan Forgiveness.

Your parent should contact their federal student loan servicer for details about their specific situation.

Yes. If you are required to report parental information on your FAFSA, your parent may be eligible to borrow a Parent PLUS Loan on your behalf. Whether or not you qualify for a legacy exception determines how much your parent can borrow.

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Financial Aid and Scholarship Office

Office: 333 Eagle LN, 102 Sutton Hall, Cheney, WA 99004

Office Hours: Monday-Friday, 9 a.m. to 4 p.m.
Phone Hours: Monday-Friday, 9 a.m. to 4 p.m.
Phone: 509.359.2314 | Fax: 509.359.4330
Email: finaid@ewu.edu

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