Upcoming Federal Student Aid Changes for 2026–2027

The federal government has introduced new legislation called the One Big Beautiful Bill (OBBB) that updates several student aid programs beginning with the 2026–2027 academic year. These changes impact federal loans, repayment options, and certain eligibility rules.

Information provided is subject to change as final rules and regulations are still being released by the Department of Education.

What’s Changing

Part-Time Enrollment and Loan Eligibility

Beginning with the 2026-2027 academic year, federal direct loans will be reduced if enrolled less than full-time.

Parent PLUS Loan Limits

Parent PLUS Loans will have new limits starting July 1, 2026:

• Up to $20,000 per year per dependent student
• Up to $65,000 lifetime per dependent student

Legacy borrowers, students who already borrowed at least one federal loan or had a Federal Parent PLUS Loan borrowed for them prior to July 1, 2026, may continue to borrow for up to three additional years or until they have completed their program of study, whichever comes first.

A student can lose their Legacy borrower status if they:

• Exceed the length of their program (for example, beginning the fifth year of a four-year program).
• Withdraw from all classes in a term.
• Withdraw from the University.
• Take a leave of absence.

Graduate Level Changes:

Updated Borrowing Limits

Beginning July 1, 2026, lifetime borrowing limits will shift:

• New $100,000 lifetime limit

These limits apply only to graduate borrowing and do not include previous undergraduate loans.

Graduate PLUS Loans

Federal Graduate PLUS Loans will be phased out starting July 1, 2026, for new graduate students.

There is a Legacy provision which states current graduate students who already borrowed at least one federal loan prior to July 1, 2026 may continue to borrow for up to three additional years or until they have completed their program of study, whichever comes first.

A student can lose their Legacy borrower status if they:

• Exceed the length of their program (for example, beginning the third year of what is expected to be a two-year program).
• Withdraw from all classes in a term.
• Take a leave of absence.
• Change a degree program.

New Federal Repayment Option

Loans disbursed after July 1, 2026, will be repaid under either:

• A standard repayment plan, or
• A new income-driven plan called the Repayment Assistance Plan (RAP)