Mind the gap: Students grapple with loan loss
As the One Big Beautiful Bill’s loan restrictions loom, undergraduate students wonder if their paths to graduation remain fixed.
Financial aid concerns are growing among college students as changes under the One Big Beautiful Bill Act take effect in the 2026-27 academic year. The legislation changes federal student loan limits and Pell Grant eligibility.
Before the changes, Parent PLUS loans, or Parent Loans for Undergraduate Students, allowed parents to borrow money from the federal government to help pay their tax-dependent undergraduate’s college costs. Graduate PLUS loans also allowed graduate and professional students to borrow federal money through a loan, taking over education costs not covered by other forms of aid.
The bill’s changes took effect in July, bringing a $65,000 lifetime limit on Parent PLUS loans and a $20,000 annual limit on loans for each dependent student. Graduate PLUS loans were eliminated for many new borrowers, with annual federal loans maxed at $50,000 for professional students and $20,500 for graduate students.
For Ruz Casa, a junior public health major, the financial pressure strains more than her undergraduate degree. Casa plans to attend physician assistant school, but the new borrowing limits may affect her ability to do so.
“I know I’m definitely gonna have to take out maybe more loans, however I am eligible for [financial aid],” Casa said. “I’m gonna have to at least take a gap year so I can make money before I’m able to attend graduate school.”
When Casa spent one month balancing school and work she found it mentally taxing.
“It’s very stressful and it’s most likely very depressing, depending on the job environment,” Casa said. “Cause, I mean, you’re very isolated. Like, it’s just school and work, school and work, or like constant stress about how to get to and from work and make ends meet.”
Some students are eligible for funds that do not have to be repaid.
Pell Grants are federal grants that help eligible undergraduate students pay for college and generally do not have to be repaid. Under the new laws, students are unable to receive these grants if nongovernment grants and scholarships cover their full cost of attendance or if their Student Aid Index — a measure used to decide how much aid a student may qualify for — exceeds double the maximum Pell Grant award.
For the 2026-27 academic year, the SAI maximum is $14,790. Students who were eligible before but now exceed this amount may lose access to grant assistance, leaving them to search for other ways to fill in financial gaps.
Fran Masali, a sophomore nursing major, relies on Parent PLUS loans to assist in paying for college. She has not needed private loans this year, but she said the new rules could cause her to seek them if federal borrowing does not cover her costs.
“I feel like that limits so many students from being able to go to school,” Masali said. “If students want to be able to go to school and want to be able to learn and get their education, they can’t because they’re limited by the amount of money that they have.”
Megan Walter, a senior public policy analyst for the National Association for Student Financial Aid Administrators, a national non-profit support network for college financial aid workers, said the One Big Beautiful Bill Act was the largest restructuring of federal student loans and aid generally in decades. The eliminations may leave students with funding gaps, she said.
“These students are less likely to have family resources or the credit history needed to fill a gap with private loans,” Walter said. Some may have to choose cheaper programs, attend part time or drop out.
Rebecca Alosi, senior director of university communications, said in an email that the loan restrictions “have very little impact on our low-income undergraduate students here at UMD.”
She said students that are enrolled in less than a full-time course load and new graduate student borrowers are feeling the impact of aid changes.
To minimize the impact, Alosi said, the university “provides multiple financial aid options, including institutional grants and scholarships, payment plans and other options.”
For Masali, transportation has never been a major expense because she lives on campus.
Even with the loans covering her tuition and on-campus housing, Masali said she has begun struggling to afford the physical textbooks required for her nursing classes, which she cannot always access online. In the summer, she says she works to cover expenses that she suspects her loans will not pay for.
“I feel like my family makes too much money to get enough assistance through the university’s tuition-support program, but not enough to comfortably afford college. I feel like financial aid should be on a sliding scale to better support families in that position,” Masali said.