Federal Aid Changes

The One Big Beautiful Bill Act (OB3), signed into law on July 4, 2025, introduced many significant reforms to federal student aid in decades. While these changes will not affect the 2025-2026 aid year, they will change how students and parents finance their education beginning July 1, 2026.

Please be aware, while many of these changes will not have an effect on students during attendance at Long Beach City College (as we do not offer Parent PLUS Loans nor Graduate/Professional Loans), it is important for you to be aware of these changes as you choose your future educational goal and career path.

Important: The information provided here is based on current guidance and understanding of the new federal regulations and it subject to changes. The Department of Education will release their final regulations in late Spring 2026. For the most up-to-date information, please visit Federal Student Aid’s OB3 Updates Page.

Key Regulation Changes

Loan Enrollment Proration

Starting July 1, 2026, federal law requires institutions to prorate annual loan amounts based on your enrollment status. If you are enrolled less than full time, your loan eligibility will be reduced proportionally. This is similar in structure to how the Pell Grant Program already works.

This rule will apply to all students, including those who fall under the Legacy Provision (see below).

New Direct Unsubsidized Loan Limits

OB3 establishes new annual and lifetime (aggregate) limits based on your degree type.

Student Type	Annual Limit	Program Limit
Undergraduate and Professional Undergraduate	No Changes	No Changes
Graduate Student	$20,500	$100,000
Professional Student	$50,000	$200,000

Lifetime Loan Aggregate Limit

Beginning July 1, 2026, a new lifetime maximum of $257,500 loan limit for all federal student loans, with the exception of PLUS Loans, will be implemented.

Parent Loan for Undergraduate Students (PLUS) limits

Though not offered at LBCC, new parent borrowers will have an annual limit of $20,000 and an aggregate limit of $65,000 per dependent student. Previously, borrowers had been able to cover the full cost of attendance through a Parent PLUS Loan, with no specific limit in place.

Graduate PLUS Loan Program

The Graduate PLUS Loan Program will be eliminated for new borrowers beginning with aid year 2026-2027. This program was an option for graduate and professional students to cover the full cost of their cost of attendance.

Pell Grant Eligibility

Students who receive non-federal aid (including outside scholarships and grants) that will cover the full cost of attendance of a college will no longer qualify for the Pell Grant Program, even if they are otherwise eligible to receive the grant.

The Legacy Provision

If you are enrolled and borrowing federal loan funds prior to July 1, 2026, you may be eligible to continue under the “old” rules (including access to Graduate PLUS loans) through a Legacy Provision.

To qualify for the Legacy Provision, you must meet ALL three requirements below:

1. You must be admitted, enrolled, and attending classes in your current program prior to July 1, 2026.
2. You must have received a Direct Unsubsidized or PLUS Loan for your current program prior to July 1, 2026.
3. You may remain under this provision only for the lesser of three years or the remaining time to complete your specific program (defined as the difference between your programs published length and the amount of time you have already completed).

Loss of Legacy Provision

Students who meet the Legacy Provision will lose the exception and be subject to the new more restrictive rules if any of the following occur after July 1, 2026:

• The student changes their program of study.
• The student withdraws from all courses within a term after beginning attendance.
• The student takes a Leave of Absence.