FAFSA and Financial Aid Just Changed: What San Diego Families Need to Know for 2026
If financial aid already felt confusing, this month added a new layer. The One Big Beautiful Bill Act (OBBBA) went into effect July 1, 2026, changing some fundamental assumptions families have been making about how to pay for college.
Here's what actually changed, and why it matters for families planning right now.
What Changed with Financial Aid in 2026
The most significant change for families of college-bound students is the new Parent PLUS loan cap. Starting this month, parents can borrow a maximum of $20,000 per year per student, with a $65,000 lifetime limit. Previously, parents could borrow up to the full cost of attendance with no ceiling.
For families who planned to cover gaps by borrowing "whatever we need," this changes the math - especially at higher-cost schools.
A few other changes worth knowing:
Small business and farm assets are now excluded from FAFSA calculations, which can lower your Student Aid Index (SAI) and improve need-based aid eligibility for families who own them.
Pell Grant eligibility tightened - students enrolled less than half-time no longer qualify, and families above a new SAI threshold are ineligible.
Income-driven repayment plans have been eliminated for new borrowers, replaced by a standard plan and a new Repayment Assistance Plan (RAP).
Why This Matters for College List Strategy
These changes reinforce something I build into my process from the start: financial fit belongs on the list from day one, not after acceptance letters arrive.
A few things I recommend for any family in the planning stages:
Run net price calculators early. Every college has one. They're imperfect but directionally useful.
Understand merit vs. need-based aid. Some schools offer generous merit scholarships regardless of income; others are purely need-based. This distinction shapes which schools belong on your list.
Don't assume expensive private schools are out of reach. Sometimes private universities end up costing less than out-of-state public options, depending on your family's profile.
Factor in the new borrowing limits. With Parent PLUS now capped, families need to know their number before the list is set - not after.
The Bottom Line
The rules changed this month. Families who treat financial aid as something to sort out after acceptance letters arrive are working with an outdated playbook.
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