Types of Aid

The federal government recently passed a sweeping budget plan called the One Big Beautiful Bill Act (OB3). This new law introduces major updates to Federal Financial Aid. Effective July 1, 2026, these changes shape borrowing limits, loan structures, and eligibility requirements nationwide.

Here is a breakdown of what these updates mean for you:

New Federal Pell Grant Eligibility Rules

The new law introduces a strict rule regarding how outside financial aid interacts with the Federal Pell Grant.

• The Cost of Attendance (COA) Cap: You are no longer eligible to receive a Federal Pell Grant if your total grants and scholarships from non-federal sources (such as institutional aid, state grants, or private scholarships) meet or exceed your total Cost of Attendance.

Example: If your Cost of Attendance is $12,000 and you receive a $12,000 private or institutional scholarship, you will no longer qualify for your Pell Grant, even if your Student Aid Index (SAI) normally qualifies you for one.

New Annual School Loan Limits

Under the new regulations, colleges have the authority to establish lower annual borrowing limits. Our institution’s annual limits for the 2026–2027 academic year are set as follows:

New Lifetime & Graduate Borrowing Limits

While undergraduate lifetime aggregate limits remain the same, the law introduces strict caps on graduate programs, overall lifetime borrowing, and eliminates a major loan program:

• Undergraduate Dependent Aggregate Lifetime Limit: $31,000 (No change)
• Undergraduate Independent Aggregate Lifetime Limit: $57,500 (No change)
• Graduate Aggregate Lifetime Limit: $100,000
• Total Lifetime Direct Loan Borrowing Cap: $257,500 (Includes all undergraduate, graduate, and professional study degrees)
• Terminated: Graduate PLUS Loans: This program has been officially terminated by the federal government for new borrowers.

Parent PLUS Loan Changes

Parent PLUS Loans now face strict new federal caps per student:

• Annual Limit: A maximum of $20,000 can be borrowed per student, per year.
• Lifetime Limit: A maximum of $65,000 total can be borrowed for any single student.

Credit-Based Loan Proration (Enrollment Intensity)

Previously, federal loan limits were fixed amounts based on your academic year. Moving forward, loans will be prorated based on your exact credit enrollment.

Example: If you are awarded $500 for the quarter/semester and are enrolled full-time (12 or more credits), you will receive the full $500. If you enroll half-time (6 credits), your loan will be prorated by half, and you will receive $250.

Frequently Asked Questions (FAQs)

What if I need more money than the new school limits allow?
Institutional loan limits are strict caps under the new federal guidelines. Financial Aid staff cannot exceed these established institutional limits under any circumstances. We encourage you to speak with a financial aid advisor to explore alternative financing options or external scholarships.

I am a transfer student. How do these caps affect me?
Our Financial Aid office must review your entire prior borrowing history before awarding aid. Because of the new lifetime and graduate caps, transfer students may find they have significantly less (or zero) remaining federal loan eligibility.

What happens to my financial aid if I drop credits mid-term?
Your financial aid must be recalculated immediately based on your new credit load. If you drop below the enrollment status you were originally awarded for, your current or future disbursements will be reduced accordingly, and you may owe a balance to the student accounts office.

Need Help?

Navigating these new federal regulations can be complex. If you have questions about how the OB3 Act affects your specific financial aid package, please contact the Financial Aid Office at 531-622-2330 or financialaid@mccneb.edu or schedule an appointment with a navigator or advisor.

Federal Direct Loans are low interest loans that are either subsidized or unsubsidized. A Subsidized Federal Direct Loan and an Unsubsidized Federal Direct Loan can be borrowed for the same enrollment period.

Students that have been awarded Federal Direct Student Loans can accept the loans through their MCC student account. All student borrowers must have completed Loan Entrance Counseling and have an active Master Promissory Note on file with the Department of Education. If a student has not completed these previously, they can be done at any time but must be done before the loan can be disbursed.

• Federal Direct Subsidized Loans are “need based” loans. This means that the federal government will pay the interest that accumulates on your loan as long as you’re enrolled at least six credit hours and also during the six-month grace period.
• Federal Direct Unsubsidized Loans are not “need based”. The federal government does not pay the interest on the Federal Direct Student Loans. If you accept a Federal Direct Student Unsubsidized Loan, you will be responsible for the interest as it accrues and compounds, starting from when the first disbursement is made.
• Federal Direct Parent Plus Loans – Federal Direct Parent PLUS Loans enable your parents to borrow money for educational expenses. An eligible parent may borrow up to the COA (Cost of Attendance) minus any estimated financial aid you are eligible to receive. These loans are approved based upon credit. Repayment begins 60 days after all loan funds are disbursed. For more information, please contact the Financial Aid Office. To apply for a Federal Direct Parent Plus Loan please complete application on the studentaid.gov website. Select the “Apply for Parent PLUS loan” option under the parent tab. The parent applying must have or will need to create an FSA ID and password.

• Federal Pell Grant (PELL)
  Basic entitlements funded by the federal government that do not need to be repaid. This program is designed for undergraduates who do not have a bachelor’s degree, and it serves as the foundation, or base, for other forms of aid. Eligibility is based on need. The amount of the Pell grant is determined by a federal funding formula, the student’s cost of education, and the number of credit hours for which the student enrolls each quarter
• Federal Supplemental Education Opportunity Grant (SEOG)
  Basic entitlements funded by the federal government and the college that do not need to be repaid. Eligibility is based on need and availability of funds. FSEOG funds are campus-based; and therefore, limited funds are available.
• Nebraska Opportunity Grant (NOG)
  The State of Nebraska provides the Nebraska Opportunity Grant (NOG) – formerly the Nebraska State Grant – to students who meet certain qualifications. Qualifications include being a Nebraska resident, attending a Nebraska postsecondary institution, and having a minimum Student Aid Index (SAI) as determined by completing the Free Application for Federal Student Aid (FAFSA).

The NOG is awarded through postsecondary institutions within the state. Therefore, students must apply to the school to be considered for the grant.

Federal Work Study (FWS) provides employment opportunities that enable students to earn money to fund their education. Also, campus-based, FWS awards are based on documented need and availability of funds. This program encourages community service employment and work related to the student’s course of study. To the extent possible, MCC will attempt to provide employment that complements and reinforces the student’s educational and vocational career goals. FWS salaries will be paid at the current federal minimum wage and earnings are restricted to the amount of the award. Visit Careers at MCC to learn more about Federal Work Study positions.

MCC also provides Student Worker Program opportunities for students who would not otherwise qualify for Federal Work Study. These jobs are available to students with the approval of MCC’s Human Resources office and are funded by MCC. Salaries are paid at current federal minimum wage. Visit Careers at MCC to learn more about Student Worker Program positions.

The MCC Military and Veterans Services office offers advisory services about educational benefits specific to Veterans Affairs (VA)-eligible and Department of Defense-eligible students planning to enroll or currently enrolled at MCC. Visit our Military-Connect students page for more details.

Whether you’re considering attending or are already an MCC student, you can apply each academic year through a single application and be considered for all scholarships you’re eligible for. Scholarships are awarded based on financial need, academic progress, program of study or a combination of these factors. Visit our Scholarships page for more details.

MCC offers financial assistance to qualifying students who meet the special grant criteria. Click here to navigate to the Special Grants Request form.

Balance Exception Grant - Assist students who owe a balance and have not attended MCC for 1 or more academic years. The Balance Exception Grant will assist with 50% of the balance owed up to $1,000 maximum. Amounts exceeding the maximum 50% grant amount will be the student’s responsibility. Students will not be allowed to register for classes until full payments are made.

Criteria:

• GPA 2.0 or higher
• Degree seeking
• Established future funding
• Balance not a result of Return of Title IV

Fresh Start Grant - This grant assists students who have had challenges in transitioning to college and denied financial aid and other funding options due to academic performance. This grant will pay for a maximum of 9 credit hours for 2 consecutive quarters of successful academic performance.

Criteria:

• Denied SAP appeals
• Denied all funding options
• Degree seeking
• Registered classes are in declared program of study
• Pass all registered classes with C grade or better

Finisher Grant - This grant assists students who have 24 credit hours or less remaining in their first degree at MCC. The grant will only pay tuition and fee costs for remaining required courses to complete a degree program.

Criteria:

• GPA 2.0 or higher
• Only for completion of first degree at MCC
• Denied all funding options
• Pass all registered classes with C grade or better