Federal Student Aid Changes
Beginning July 1, 2026, significant changes to the federal student aid programs will take effect. The sections below provide overviews of these changes based on the student's current or anticipated level of study.
Key Terms
- Annual limit: The maximum amount that may be borrowed in one academic year
- Aggregate limit: The maximum amount that may be borrowed over a lifetime
- Existing borrower: A student or parent borrowed a Federal student or PLUS loan on or before June 30, 2026
- Future borrower: A student or parent who will borrow a Federal student or PLUS loan on or after July 1, 2026
Existing Undergraduate Borrowers
There are no changes to the federal Direct Subsidized and Unsubsidized loan limits for undergraduate students at this time. They remain:
Federal Direct Subsidized and Unsubsidized loan eligibility will be reduced for students enrolled in more than 6 credit hours but fewer than 12 credit hours in a semester. For example, if a student is enrolled in 9 credit hours (three-quarter time) for the semester, they are eligible for three-quarters of their federal student loan amounts.
Additional funding option: Students who need funding beyond their federal loan limits may consider private student loans.
Maximum Pell Grant funds will remain $7,395 for those who qualify in 2026-2027. The following eligibility requirements have been changed: Students whose total non-federal grants and scholarships are greater than the total cost of attendance will not be eligible for the Pell Grant.
Existing Parent PLUS Borrowers
Parent PLUS loan eligibility will not change. Under the legacy provision, limits will remain the same (with no cap on how much a parent may borrow, up to the Cost of Attendance (COA) at their child’s institution) until (a) their child completes their degree requirements or (b) 3 additional years pass, whichever is earlier.
Future Undergraduate Borrowers
Federal Direct Subsidized and Unsubsidized loan eligibility or loan limits are:
Federal Direct Subsidized and Unsubsidized loan eligibility will be reduced for students enrolled in more than 6 credit hours but fewer than 12 credit hours in a semester. For example, if a student is enrolled in 9 credit hours (three-quarter time) for the semester, they are eligible for three-quarters of their federal student loan amounts.
Additional funding option: Students who need funding beyond their federal loan limits may consider private student loans.
Maximum Pell Grant funds will be $7,395 for those who qualify in 2026-2027. The following eligibility requirements have been changed: Students with total grants and scholarships from non-federal sources that are greater than the total cost of attendance will not be eligible for the Pell Grant.
Future Parent PLUS Borrowers
Parent PLUS loan limits are:
- Annual = $20,000 (per child)
- Aggregate = $65,000 (per child)
- Limits apply regardless of whether one or more parents use a parent PLUS loan for the student (i.e., if two parents borrow for the same student in 2026-2027, the total between the two loans will be capped at $20,000 for the academic year)
Additional funding option: Parents who need funding beyond the federal loan limits may consider private student loans.
Current Graduate Borrowers
Federal Direct Graduate Unsubsidized loan limits remain the same:
- Annual for graduate students (e.g. MA, MBA, MS) = $20,500
- Aggregate for graduate students (including all undergraduate and graduate loans) = $138,500 (no more than $65,500 of this amount may be in subsidized loans)
Federal Graduate PLUS loans will no longer be available after June 30, 2026. If students plan to borrow in excess of their unsubsidized loan eligibility, they can consider private student loans.
Federal Direct Unsubsidized loan eligibility will be reduced for students enrolled in fewer than 9 credit hours in a semester. For example, if a student is enrolled in 6 credit hours (half time) for the semester, they are eligible for half of their federal student loan amounts.
Additional funding option: Students who need funding beyond their federal loan limits may consider private student loans.
Legacy Provision: Established Graduate PLUS loan borrowers may continue to borrow under current limits until (a) they complete their current degree, or (b) 3 additional years pass, whichever is earlier.
The OBBBA does not provide exceptions for loans proportionally reduced due to enrollment status. To qualify for this, graduate students must:
- Be enrolled in their program prior to June 30, 2026
- Have previously borrowed a Graduate PLUS loan for that degree program
- Remain in the same degree program
Future Graduate Borrowers
Federal Direct Graduate Unsubsidized loan limits for graduate students (e.g. MA, MBA, MS) will be:
- Annual = $20,500
- Aggregate = $100,000
- Total aggregate usage for federal student loans throughout student’s lifetime (including all undergraduate, graduate, and professional federal loans) = $257,500
Federal Direct Unsubsidized loan eligibility will be reduced for students enrolled in fewer than 9 credit hours in a semester. For example, if a student is enrolled in 6 credit hours (half time) for the semester, they are eligible for half of their federal student loan amounts.
Additional funding option: Students who need funding beyond their federal loan limits may consider private student loans.
