Federal Financial Aid Changes

All student loans borrowed for the Fall 2026 semester and beyond will be subject to loan adjustments if students are enrolled less than full-time for the academic year.

The Financial Aid Office will be required to recalculate a student’s annual loan limit downward if they are less than full-time, which is 24 hours for the Fall and Spring terms. This may result in lower student loan amounts than prior years. 

Loans will be calculated at the time of loan origination based off of your enrollment at that time. If your enrollment changes during the semester, it may result in receiving less loan funds in your next term of enrollment.

All student loans will be subject to proration and new borrowing rules. This includes:

• Subsidized loans
• Unsubsidized loans

Parent PLUS loans are not subject to loan proration. 

Students who were enrolled and borrowing before July 1, 2026, keep their old loan limits for up to three years, or until they finish their program, or take a break from their program, whichever comes first. This is called the legacy provision.

Students lose this protection if they withdraw, transfer to a different program, or stay enrolled past their program’s expected length.

The new loan limits for the Parent PLUS Loan program are as follows:

• $20,000 per dependent student per annual year.
  • This is the total amount even if there are multiple parent borrowers for the same student, the annual limit per student cannot exceed $20,000 combined.
    
    
• $65,000 lifetime limit of PLUS loan per dependent student for the lifetime of the student.
  • This is the total lifetime limit even if there are multiple parent borrowers on the student’s behalf. The combined amount cannot be over $65,000. Previously, there was no cap. 
    
    
• If a parent pays all or a portion of the PLUS loan back, they are still unable to borrow additional PLUS loans once the $65,000 aggregate amount is reached.
• Parents can no longer borrow up to the cost of attendance.
  • Because Cuesta' College's cost of attendance is low, many families won’t hit this ceiling. But families planning for transfer to a four-year school need to factor this into their long-term plan.
    
    
  • Students who are not California residents (view California Residency Requirements) do get charged differently. If you planned to use the option of taking out a Parent PLUS loan to cover those additional costs, be aware there are now annual loan limits. 
    
    
• Parents who borrowed a PLUS loan, or a student who has borrowed a Direct Loan before July 1, 2026 may qualify for a "legacy exception" provision. 

Students with a Student Aid Index (SAI) greater than two times the maximum Pell Grant amount ($14,790) will not qualify for a Pell Grant. In addition, students whose full Cost of Attendance is already covered by private, institutional, state grants, or scholarships may receive a reduced Pell Grant or may no longer qualify for Pell funding.

Short-term career training programs will eventually be eligible for Pell funding. Cuesta College’s programs still need to go through a federal approval process that takes a year or more. We will communicate when specific programs qualify. 

Beginning April 26, 2026, the federal government added a new step to the Free Application for Federal Student Aid (FAFSA) process to protect students from identity fraud. From this date forward, random applications will be selected for an identity check.

Being selected for an identity check does not mean you did anything wrong on your application. The identity checks are only being added to improve security and reduce fraud.

How will the identity checks work?

If your application is selected, you will receive a request to verify your identity by completing a short (just a few minutes) live camera check on your phone or tablet from Federal Student Aid (FSA). Be prepared to show a valid government-issued ID. Most applications will not be selected for a check.

If you get a verification request, respond to it right away. Waiting can delay your financial aid. If you don’t have a phone or tablet with a camera, contact the Financial Aid Office to discuss options.

What should you do now?

If you have already submitted your 2026-2027 FAFSA, watch your email for any verification requests and respond promptly.

The changes begin July 1, 2026 with the beginning of the 2026-2027 academic year. There are no changes for 2025-2026.

Typically, yes. Under OBBBA, your loan eligibility is adjusted based on enrollment level. If you drop below full-time enrollment, your available loan amount may be prorated, which may result in a reduction of your loans, even if you remained eligible for the full amount in past years.

Your total annual loan eligibility may decrease if you change your enrollment during the semester. As a result, you may receive less loan funding in a future term or be required to repay a portion of the funds already received.

We encourage you to utilize the Financial Aid Office and your academic counselor as part of your support team before making enrollment or program changes mid-term, as these changes may impact your current or future loan eligibility and disbursements.

Beginning June 15, 2026, all students requesting a federal student loan will be required to attend a Loan Workshop prior to submitting a loan request, including students who have previously received loans at Cuesta College.

Workshop dates and times will be posted on the Financial Aid website: https://www.cuesta.edu/become-student/finaid/index.html.

Workshop dates will be posted on June 1, 2026.

RSVP for the workshop is required.

Switching to a new program (even at the same school) can reset your borrowing category. That means your loan limits and eligibility rules may shift to those of a “new borrower,” even if you previously qualified as a “current borrower,” or “legacy” in your old program of study.

If you cease enrollment in a semester, with the exception of the summer semester, you will be considered a new borrower and be subject to the new borrowing rules.

Some programs may require summer semester enrollment and if so, then not attending the summer semester may make you subject to the new borrowing rules.

Start by looking at when you first borrowed loans for your current program. If your federal loans for this program were disbursed before July 1, 2026, you likely fall under the “current borrower” category. If not, you will be designated as a “new borrower,” even if you borrowed in the past for a different program.

Current borrowers meeting eligibility requirements are protected only for a limited time. If your program extends beyond the allowable “legacy” window, you may be subject to the new annual and lifetime loan limits.

Students expecting to start a new program after July 1, 2026, should evaluate how OBBBA’s new limits align with total program costs, timeline to completion, and anticipated financial resources. Early planning will help avoid surprises once the new borrowing rules take effect.

Beginning with the 2026–2027 FAFSA, there are important changes to Pell Grant eligibility:

Students whose Student Aid Index (SAI), as determined by the FAFSA, is more than twice the maximum Pell Grant amount of $14,790 will not qualify for a Pell Grant.

Students whose full Cost of Attendance is already covered by other state, institutional, or private grants and scholarships will also not be eligible to receive a Pell Grant.

Additional guidance from the U.S. Department of Education regarding these updates can be found in the 2026–27 FAFSA Form and Pell Grant Eligibility Updates.

No. The new law does not change how students qualify for Federal Work-Study. At this time, Work-Study eligibility will continue to be based on financial need as determined by the FAFSA and institutional packaging policies. Schools will still decide how much Work-Study funding is available and which students are offered it.