Federal Financial Aid Changes
The House of Representatives Bill 1, known as the One Big Beautiful Bill Act (OBBBA) was passed on July 4, 2025. This Act affects several federal financial aid programs and processes and this page provides highlights on the changes most impactful for our students. While final regulations have been issued as of May 2026, we will continue to update the information on this site as new guidance becomes available.
Changes to Federal Financial Aid
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Federal Pell Grant
OBBBA secured two years of Federal Pell Grant funding and establishes the Workforce Pell program for short-term certificates. COCC is working with the state for official guidance and approval prior to implementing applicable programs.Beginning in the 2026-27 academic year, students receiving non-federal grants and scholarships that cover 100% of their estimated Cost of Attendance and students with a Student Aid Index of at least twice the value of the maximum Pell award, will no longer be eligible for Federal Pell Grants.
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Federal Direct Student Loans
Beginning with the 2026-27 academic year, the OBBBA requires schools to prorate Federal Direct Loans for students enrolled less than full-time. This means your loan amount will be adjusted to match your specific enrollment level when your eligibility is determined. You must still be enrolled at least half-time to qualify for Federal Direct Loans.
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Federal Direct Parent PLUS Loans
The OBBBA places annual and lifetime aggregate limits on Parent PLUS Loans effective July 1, 2026. Parents of dependent undergraduate students will be able to borrow up to $20,000 per academic year for their student and up to $65,000 over that student's academic career. These limits apply per student, regardless of how many parents are borrowing. A legacy provision is in place for current parent borrowers to continue to borrow Parent PLUS Loans under the current rules for up to three years, or until their student completes their program, whichever comes first.
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Federal Loan Repayment Plans
The OBBBA reduces the number of repayment plan options to a single income-based plan, Repayment Assistant Plan (RAP), and an updated Standard Repayment Plan. These new plans will begin July 1, 2026, for any new loans borrowed after that date.
If a current borrower does not borrow 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 or RAP, has varying monthly payments based on the borrower's and their spouse's Adjusted Gross Income (AGI). The rate will be between 1-10% of the 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 that 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. Loans borrowed after July 1, 2026 will automatically be placed in the Standard Repayment Plan unless the student choose another option when entering repayment.
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Institutional Accountability
To ensure program value, the Department of Education now monitors "Gainful Employment for All." This metric compares the earnings of college graduates to those of high school graduates in related careers. Programs where graduates consistently earn less than their peers without a degree may lose access to federal student loans.