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Updates and Changes to Aid
The One Big Beautiful Bill Act (OB3) was signed into law on July 4, 2025, making changes to higher education nationally, including federal student loan eligibility and repayment. Several provisions went into effect immediately, while other provisions will begin on July 1, 2026.
NOTICE FOR AY2025-26: There are no changes to federal student aid for the fall 2025 and spring 2026 terms.
The Office of Financial Aid at VMI is committed to guiding students and families along their aid journey from research to application, working to provide the best package possible to qualified applicants and cadets. We are also a support as students and families navigate updates in federal programs and policies, providing updates as new guidance is released by the U.S. Department of Education.
Evolving Information: This page may update at any time, as new information is released and rules and guidelines are established. While we endeavor to be as prompt as possible, we strongly advise students and families monitor studentaid.gov for the latest official communications regarding OB3 and other programs and legislation.
Last Updated: Feb. 26, 2026
FAFSA Form Changes, 2026-2027
Beginning in Academic Year 2026-2027, the Student Aid Index (SAI) asset calculation will exclude the following from the current net worth of businesses and farms. These items should NOT be reported as assets on the Free Application for Federal Student Aid (FAFSA) form:
- The current net worth of family-owned business (with fewer than 100 full-time employees or full-time equivalent).
- The net worth of farms on which the family resides.
- The net worth of family-owned-and-controlled commercial fishing business and related expenses.
Federal Pell Grant Eligibility Changes
EFFECTIVE JULY 1, 2026
- The foreign earned income exclusion amount reported on the FAFSA will be added to the adjusted gross income when determining Federal Pell Grant eligibility.
- Factors Rendering Students Ineligible:
- Students who receive non-federal grants or scholarships covering the full Cost of Attendance (COA) will be ineligible for a Federal Pell Grant.
- Students with a Student Aid Index (SAI) equal to or greater than twice the maximum Federal Pell Grant award amount for the award year will be ineligible for the grant. A limited exception applies for dependents of deceased service members and safety officers.
Federal Loans Changes
New Limits in Place:
- Parent PLUS Loans: New borrowers will have an annual limit of $20,000 and a aggregate limit of $65,000 per dependent student.
- Federal Loan Program Lifetime Loan Limits: $257,500 lifetime borrowing limit on all federal student loans, excluding PLUS Loans.
PLEASE NOTE: VMI highly discourages families who are borrowing PLUS loans to not automatically request the full amount as students will likely run out of funds before graduation. The max is $16,250 annually (which is below the annual limit) to ensure you have PLUS funds for all four years of your cadetship (not exceeding the aggregate limit).
Annual Amount Proration for Less then Full-Time Enrollment:
Loan amounts will be prorated based on enrollment status. Less than full-time enrollment equals reduced eligibility. Enrollment status is determined by the program in which a student is enrolled in.
Legacy Provision:
If a borrower has a Federal Direct Loan made before July 1, 2026, while the dependent student is enrolled in a credentialed program, the parent or borrower can continue to borrow under current loan limits for 3 academic years or the remainder of the student’s expected time to credential, whichever is less.
Federal Loan Repayment:
Revised income-based repayment (IBR) plans are effective now. Two new repayment plans have been established for borrowers who receive loans on or after July 1, 2026.
Frequently Asked Questions
Changes to financial aid processes, regulations, and limits can be frightening and cause worry for students and their families. Our team is available to guide you along these changes and your financial aid journey should you have specific questions or concerns. Here are some quick answers to frequently asked questions:
No. If you’re currently receiving aid in the 2025-2026 financial aid year, your loans and grants remain under their present terms for now. Most changes including new loan limits and repayment options will apply starting in the 2026 - 2027 financial aid year.
We are monitoring federal guidance and will update you as details are finalized.
If you are currently enrolled at VMI for the Spring 2026 term and received a disbursement of any Federal Direct Student Loan before July 1, 2026, then for the program you are currently enrolled in you qualify for legacy borrowing status for up to an additional 3 years or when you complete your program whichever is less.
After you return from your leave of absence, you will be considered a new borrower for federal Title IV aid and you will be subject to the new guidelines and limits as setup in the bill.
No action is required right now. Your loans and financial aid continue under current rules for the 2025 - 2026 academic year.
As changes begin to take effect, mostly starting in the 2026 - 2027 academic year, we’ll provide additional guidance.
Continue to review this page for additional information and guidance.