By NASFAA Policy & Federal Relations Staff

The Department of Education (ED) published an electronic announcement Monday, detailing upcoming changes to several Federal Student Aid (FSA) systems to support the expansion of Pell Grant eligibility for eligible workforce programs and revised limits on federal student loans enacted under the One Big Beautiful Bill Act (OBBBA).

These system updates will be made April 26, 2026, to accommodate the July 1, 2026 effective date for the new loan limits and expansion of Pell Grant eligibility, and will include updates to the FAFSA Processing System (FPS), FAFSA Partner Portal (FPP), the Common Origination and Disbursement (COD) system, and the National Student Loan Database System (NSLDS).

As announced last summer, all student- and contributor-facing FAFSA updates related to OBBBA were already made in time for the launch of the 2026-27 FAFSA. As a result, ED does not anticipate any additional FAFSA changes related to OBBBA after these upcoming system updates.

Workforce Pell Updates 

One key update involves a new data field on the ISIR record layout and in FPP that identifies whether a student is enrolled in an eligible workforce program. This new field, titled “Enrolled in Eligible Workforce Program," supports the change to the law, effective July 1, 2026, that a student enrolled in an eligible workforce program can receive a Pell Grant even if they already have a bachelor’s degree. Currently, students with a bachelor’s degree can only receive a Pell Grant if they are enrolled in certain teacher certification programs.

It is important to note that while the FAFSA includes a question about whether a student is pursuing an initial teaching certification, there is no question about enrollment in a workforce program. As such, if a student indicates on the FAFSA that they already have a bachelor’s degree, the Pell eligibility flag will be set to ‘no’ on the ISIR unless they also indicate they are pursuing an initial teaching certification. Because there is no FAFSA question asking about workforce program enrollment, all initial FAFSA records will have the new “Enrolled in Eligible Workforce Program” field set to blank. Financial aid administrators will need to manually change this field to “yes” for students enrolled (or accepted for enrollment) in an eligible workforce program. The electronic announcement states this manual update will need to be made via “EDE batch correction,” but does not say if the update can also be made individually in FPP. *NASFAA plans to follow up with the department on this detail. Once this field is set to “yes,” FPS will process a new transaction that includes the student’s Pell Grant eligibility. ED noted that institutions remain responsible for confirming students meet all Pell Grant eligibility requirements before disbursing funds.

The new transaction showing the student’s updated Pell Grant eligibility will be sent to all schools listed on the student’s FAFSA, even if they did not update the “Enrolled in Eligible Workforce Program” field, and even if the student is not enrolled in a workforce program at those other schools. ED stated they will update the text displayed on the student’s FAFSA Submission Summary to make this clear.

A new warning will also be added to COD to prevent schools from inadvertently disbursing Pell Grant funds to a student who is only eligible for Pell based on enrollment in a workforce program at a different school. The electronic announcement says, “This warning will prompt schools to confirm that the disbursement is for an eligible workforce program whenever they attempt to disburse funds on a transaction with the 'Enrolled in Eligible Workforce Program' indicator selected and for which tuition and fees were not reported.”

Because the “Enrolled in Eligible Workforce Program” field is manually updated, if a student enrolled in a workforce program later ceases to be enrolled in an eligible program, schools should then manually update the field to “no.” This includes students who were accepted into an eligible program but did not enroll.

Loan Limit Updates

The department also announced changes to the NSLDS match process due to the new aggregate and lifetime limits on federal student loans, new annual and aggregate limits for Parent PLUS Loans, and the elimination of the Graduate PLUS Loan program. The announcement states, “The NSLDS Information block on the ISIR has been updated to accommodate new aggregate loan limits, academic levels, and loan limit exception flags. This includes several new fields, as well as 12 additional NSLDS post-screening reason codes.” The 2026–27 FAFSA Specifications Guide has already been updated to reflect these changes. Specifically, Volume 4A-Records Layout shows the updates to the ISIR record layout and details these changes in the Change History Table. Changes to other volumes of the FAFSA Specifications Guide will be published over the next month as well.

Importantly, the EA notes that “There won’t be a large-scale reprocessing effort as part of this launch. Changes to student records in NSLDS may trigger a post-screening NSLDS system-generated transaction using the existing process.” At last week’s Federal Student Aid Training Conference, ED officials provided more information about how students would be identified as subject to either the new loan limits or the existing limits under the limited exception eligibility requirements for purposes of originating new loans and for tracking remaining aggregate and lifetime eligibility.

In that session, ED officials shared that COD will automatically identify students who received a Direct Loan for the 2025-26 award year with an award end date on or after April 4, 2026 as eligible for the limited exception using a new “grandfathering flag.” This flag is what will prompt the NSLDS postscreening process and display the new postscreening reason codes on subsequent ISIR transactions, reflecting whether students are close to or exceeding aggregate and lifetime limits based on which limits apply to them. Because of this, ED officials advised institutions not to hold off on sending origination records to COD for 2026-27, since that will serve as the trigger to flag limited-exception eligible students.

In Monday’s announcement, ED noted that only the 2026-27 ISIR record layout would be changed when these updates are made April 26, 2026. There will be no change to the 2025-26 ISIR record layout. Any 2026–27 ISIR generated on or after April 26 will be generated in the new record layout.

As a reminder, while the system updates will be made April 26, 2026, the expansion of Pell Grant eligibility to eligible workforce programs and the changes to federal student loan limits are not effective until July 1, 2026. ED also noted that the guidance provided in the electronic announcement is based on the proposed regulations, as published in the recent Notice of Proposed Rulemaking (NPRM). If there are any changes in the final rules impacting these updates, additional guidance will be released.

*NASFAA has confirmed with ED that the update can also be made via FPP. The electronic announcement will be updated to reflect that clarification.

Publication Date: 3/11/2026

Comments Disclaimer: NASFAA welcomes and encourages readers to comment and engage in respectful conversation about the content posted here. We value thoughtful, polite, and concise comments that reflect a variety of views. Comments are not moderated by NASFAA but are reviewed periodically by staff. Users should not expect real-time responses from NASFAA. To learn more, please view NASFAA’s complete Comments Policy.