Federal Aid Changes:

What's Changing? 

The OB3 law includes significant changes to federal student loans, borrowing limits, and repayment options. Many of these provisions require additional federal regulations before they can be fully implemented. The U. S. Department of Education is currently completing that process. Because the federal rulemaking process is ongoing, this page will be updated as new information becomes available. For the most up-to-date information from the Department of Education, please visit Federal Student Aid’s OB3 Updates page.

Student Borrowing

Before July 1, 2026, students could borrow federal loans for as long as they were enrolled. After July 1, 2026, loan eligibility is based on how long your program is supposed to take. A two-year program gets roughly two years of borrowing – even if the student takes longer to finish.

This matters most for part-time students. Taking 9 units per term instead of 15 can stretch a two-year program into four years. The loans run out after two years either way.

Plus, new borrowers enrolled less than full-time (fewer than 12 units) can only borrow in proportion to their unit load, similar to how Pell Grants already work.

Parent Borrowing

Parents can now borrow a maximum of $20,000 per year and $65,000 total per child, across all years. Previously, there was no cap. Because FRC’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.

Please note that students who are not California residents 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. You can no longer borrow up to the cost of attendance.

FAFSA

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.

Pell Grants

Short-term career training programs will eventually be eligible for Pell funding. FRC’s programs still need to go through a federal approval process that takes a year or more. We will communicate when specific programs qualify. For now, the message is honest: it’s coming, stay tuned.

Protection for Existing Borrowers

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, whichever comes first. This is called the legacy provision. They lose this protection if they withdraw, transfer to a different program, or stay enrolled past their program’s expected length.

Degree and Certificate Programs Will Now Be Held to an Earnings Accountability Standard

If a major for a degree or certificate program doesn’t earn more than a typical high school graduate without a degree or certificate in that field, the new federal laws may not pay aid for those majors. The federal law now benchmarks these earnings against state and national averages. 

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