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Last Updated: May 12, 2026
Big changes are coming to federal financial aid and student loans beginning in Fall 2026.
Starting July 1, new federal rules will reshape how students and families pay for higher education ‒ especially those who rely on federal student and parent loan programs. These updates may affect how much aid you can receive, the types of loans available to you and how enrollment status impacts your eligibility.
What students should know
- You may be able to borrow less than before.
If you’re a part-time student (taking fewer than 24 credit hours per academic year), colleges and universities will be required to recalculate your loan amount. - Your borrower status matters.
Whether you’re a new borrower or a current (legacy) borrower will affect your loan limits and options. - How much you’ve already borrowed may matter.
Your past borrowing could impact how much federal aid you can still receive. - Parent and graduate student loans are changing, too.
If your parent or guardian helps pay for school using federal Parent PLUS loans, or you are a graduate student borrower, your borrowing options will be more limited.
What’s behind these changes?
These changes are part of the federal legislation known as the One Big Beautiful Bill Act signed into law on July 4, 2025.
ÍøÆØ³Ô¹Ï is actively reviewing the new federal guidance and will continue sharing updates as more information becomes available from the U.S. Department of Education.
Please note: Information on this page reflects our current understanding of the new law and may change as additional federal guidance is released. Please check back regularly for updates.
Key Federal Financial Aid Changes
All student loans borrowed for the Fall 2026 semester and beyond will be subject to loan adjustments if students are enrolled less than full-time for the academic year.
The Office of Financial Aid and Scholarships will be required to recalculate a student’s annual loan limit downward if they are less than full-time, which is 24 hours for an undergraduate student and 12 hours for a graduate student total for the Fall and Spring terms. This may result in lower student loan aid for part-time students.
Loans will be recalculated at the time of disbursement based off of your enrollment at that time.
If your enrollment changes during the semester the loan was intended for, it may result in receiving less loan funds in your next term of enrollment.
All student loans will be subject to proration, which may result in a reduction of your loans, starting in the Fall 2026 semester and beyond. This includes:
- Subsidized loans
- Undergraduate and Graduate unsubsidized loans
- Graduate PLUS loans
- Parent PLUS loans will not be prorated
The new loan limits for the Parent PLUS Loan program
- $20,000 per dependent student per annual year. This is the total amount even if there are multiple parent borrowers for the same student, the annual limit per student cannot exceed $20,000 combined.
- $65,000 lifetime limit of PLUS loan per dependent student for the lifetime of the student. This is the total lifetime limit even if there are multiple parent borrowers on the student’s behalf. The combined amount cannot be over $65,000.
- If a parent pays all or a portion of the PLUS loan back, they are still unable to borrow additional PLUS loans once the $65,000 aggregate amount is reached.
Parents who borrowed a PLUS loan, or a student who has borrowed a Direct Loan after July 1, 2026 may be subject to new annual and aggregate borrowing limits.
- Exception for legacy provision: Parents are not subject to the new PLUS loan limits for up to three academic years or the remainder of the student’s expected time to credential (whichever is less) if the student remains continuously enrolled in the same program of study at the same institution as of June 30, 2026 or the student had a Direct Loan disbursed for the same program before July 1, 2026.
- Expectation is that an undergraduate student can switch majors but must have continuous enrollment at the same institution to keep the legacy provision.
- Please note that borrowing a new PLUS loan after July 1, 2026 could result in significant impacts to your current repayment plan if you are enrolled in one. Carefully review the information included in the Change in Repayment Plans section below.
Change in repayment plans
- For Parent PLUS Loans taken out on or after July 1, 2026, the only repayment plan option available will be a new tiered standard repayment plan. This tiered standard repayment plan offers a fixed monthly payment over 10-25 years based on the outstanding balance of the loans.
- This applies to parent borrowers with existing Parent PLUS Loans who borrow a new loan on or after July 1, 2026, as well, because the law requires that all Parent PLUS Loans be repaid under the same repayment plan.
- Parents who currently have Parent PLUS Loans in repayment and borrow a Parent PLUS loan after July 1, 2026, will have all of their Parent PLUS Loans moved to the tiered standard repayment plan, potentially changing the monthly payment amount.
- Current PLUS Loan borrowers may repay loans under the following repayment plans until their loans are full repaid, but only if they do not borrow new Parent PLUS Loans on or after July 1, 2026:
- 10-year standard repayment plan
- Extended repayment plan
- Graduate repayment plan
- Parent PLUS Loan borrowers who consolidated their PLUS Loans before July 1 may repay their loans under the income-contingent repayment (ICR) plan through June 30, 2028, at which point that plan will sunset and will be moved to the income-based repayment plan (IBR).
- Parents who want access to an income-driven repayment plan and/or loan forgiveness for their Parent PLUS loans must:
- Have consolidated their Parent PLUS loans prior to July 1, 2026, and are enrolled in the ICR plan prior to July 1, 2028 AND
- Not have borrowed a new Parent PLUS loan on or after July 1
Public Service Loan Forgiveness (PSLF)
- Borrowing a new Parent PLUS Loan on or after July 1, 2026 prevents parent borrowers from receiving PSLF even if they have already made qualifying payments.
- The parent borrower will be moved into the new tiered standard repayment plan.
- Parents who are planning to borrow a Parent PLUS Loan on or after July 1 but who want to preserve their eligibility for PSLF may want to carefully consider other ways to help finance their student’s education.
Changes to Graduate Student Borrowing
- These new changes eliminate the Graduate PLUS Loan Program
- Graduate students will have a new aggregate lifetime limit of $100,000.
- The $100,000 aggregate limit in unsubsidized loan borrowing will not include any undergraduate loans borrowed.
- Currently, graduate students have a lifetime limit of $138,500 but this is a combined total for undergraduate and graduate loan debt.
- Depending on the amount a student has borrowed for their undergraduate degree, some students will have increased borrowing limit for their graduate degree and some will have a decreased borrowing limit for their graduate degree.
Exception to the new graduate borrowing rules
- Graduate students who have borrowed a direct loan prior to July 1, 2026 and remain continuously enrolled in the same program of study at the same institution and borrowed a Direct Loan for that program of study before July 1, 2026 will be able to continue to borrow Graduate PLUS loans for up to three academic years or the remainder of the student’s expected time to credential (whichever is less).
Frequently Asked Questions (FAQs)
The changes begin with the 2026-2027 academic year. There are no changes for 2025-2026.
Your total loan eligibility for the year may decrease. As a result, you could receive less loan funding next term or may need to repay part of what you already received. We recommend reaching out to your academic advisor to discuss enrollment goals and how to best set yourself up for success in all of your enrolled courses for a semester.
If you are an undergraduate student, switching majors will NOT result in a change to your current borrowing rules. If you are a graduate student, switching majors MAY result in a change to your current borrowing rules.
Beginning with the 2026-2027 FAFSA, there are changes to the Pell Grant Eligibility:
- Any student with a Student Aid Index (SAI) as determined by the FAFSA that is more than twice the maximum Pell Grant amount is ineligible for the grant.
- Students whose cost of attendance is covered in full by other scholarships/grants are not eligible for the Pell Grant.
Guidance from the U.S. Department of Education detailing these changes can be found on
Switching to a new program (even at the same school) can reset your borrowing category. That means your loan limits and eligibility rules may shift to those of a “new borrower,” even if you previously qualified as a “current borrower,” or “legacy” in your old program.
Yes, but starting in the 2026-27 academic year, new limits apply:
Parents will be capped at $20,000 per year and $65,000 lifetime in PLUS borrowing per student.
If the student’s parent is eligible for the exception to the new borrowing rules and limits, their parent will be eligible to borrow under the previous loan limits for the remainder of their student’s program or three years, whichever is shorter. However, the student must remain continuously enrolled in their program of study or their parent will be subject to the new borrowing limits.
Current borrowers meeting eligibility requirements are protected only for a limited time. If your program extends beyond the allowable “legacy” window, you may be subject to the new annual and lifetime loan limits.
Typically, yes. Under OBBBA, your loan eligibility is adjusted based on enrollment level. If you drop below full-time enrollment, your available loan amount may be prorated, which may result in a reduction of your loans, even if you remained eligible for the full amount in past years.
Yes.
If you cease enrollment in a semester, with the exception of the summer semester, you will be considered a new borrower and be subject to the new borrowing rules.
Some programs may require summer semester enrollment and if so, then not attending the summer semester may make you subject to the new borrowing rules.
Start by looking at when you first borrowed loans for your current program. If your federal loans for this program were disbursed before July 1, 2026, you likely fall under the “current borrower” category. If not, you will be designated as a “new borrower,” even if you borrowed in the past for a different program.
No. The new law does not change how students qualify for Federal Work-Study. At this time, Work-Study eligibility will continue to be based on financial need as determined by the FAFSA and institutional packaging policies. Schools will still decide how much Work-Study funding is available and which students are offered it.
Private financing programs are unsecured educational loans offered by banks, credit unions, and other lenders. These loans must be repaid with interest. Rates and fees depend on your creditworthiness and sometimes that of a co-signer (or co-borrower). Most lenders require a minimum credit score of around 640 for loan approval.
Creditworthiness
Creditworthiness refers to your ability to repay a loan based on your credit history. Lenders look at your credit score, payment history, and overall financial behavior to decide whether or not to approve your loan and what interest rate to offer.
A strong credit profile can mean lower interest rates and fewer fees, saving you money over time. If your credit score is low or you have limited credit history, lenders may see you as a higher risk, which can lead to higher costs or even denial of your application.
Some tips to build and maintain good creditworthiness:
- Pay bills on time.
- Keep credit card balances low.
- Avoid opening too many accounts.
- Maintain older accounts.
- Check your credit report regularly.
- Build credit responsibly
- Limit hard inquiries.
What You Should Do Right Now to Prepare
Now is the perfect time to check your credit, understand your credit rating and take steps to strengthen it if needed. You can start by obtaining a free credit report. Reviewing your credit report for errors, paying down existing debt, and making payments on time to improve your score before applying are all steps you can take now to prepare.
If your score isn’t quite there yet, don’t stress. Many students look to a credit-worthy co-signer to hep secure a private loan.
Securing Private Financing: Co-borrowers
If you’re not considered credit-worthy, don’t worry. The most common and effective solution is applying with a co-borrower who has strong credit.
A co-signer or co-borrower is someone who aggress to share responsibility for the loan and helps reassure the lender that the loan will be repaid. This is usually a parent, guardian, or trusted relative who has strong credit and is supportive of your educational goals.
Undergraduate students usually need a co-borrower. Graduate students can apply for private financing on their own, but may still benefit from having a co-borrower, for example, to qualify for better interest rates. Remember: This is a serious commitment, and the co-borrower is legally responsible for repayment if you cannot repay yourself.
Students expecting to start a new program after July 1, 2026, should evaluate how OBBBA’s new limits align with total program costs, timeline to completion, and anticipated financial resources. Early planning will help avoid surprises once the new borrowing rules take effect.
Additional Information
The information above is based on our current knowledge of federal financial aid changes connected to the One Big Beautiful Bill Act (OBBBA). Policies, processes, and the guidance on this webpage are subject to change as new details emerge.
Visit StudentAid.gov for more information.