2026-2027 Financial Aid Changes
Congress passed the One Big Beautiful Bill in July 2025, which introduced several changes to federal student loans beginning July 1, 2026. This legislation introduces many changes to financing higher education.
Highlights Include:
Information for Current Borrowers
Upcoming Changes to Federal Student Loan Limits
Loan Proration for Part-Time Students
Information for Graduate Students
New Federal Loan Repayment Plans
Related Website Links:
Private Alternative Student Loans
Current Borrowers
Students and parents who have borrowed under the Federal Direct Loan Program before July 1, 2026 may continue to access loans under the expiring limits for up to three additional years, or for the remaining time needed to complete your current degree. This is calculated by the minimum length of your program, less the amount of time you have completed, whichever is sooner.
Upcoming Changes to Federal Student Loan Limits
The following are new borrowing limits under the Federal Direct Loan Program, effective July 1, 2026:
- Graduate programs: Limited to $20,500 per year or $100,000 for the degree.
- Undergraduate programs: Student borrowing remains unchanged, but Parent PLUS Loans will be capped at $20,000 per year and $65,000 for the degree.
Loan Proration for Part-Time Students
The new law will prorate loan limits for students enrolled less than full-time (11 credits or less). For example, a half-time student (6-8 credits) might only be eligible for half the annual borrowing limit.
Information for Graduate Students
New graduate students starting with the 2026-2027 year will no longer be able to borrow Federal Direct Graduate PLUS Loans beginning July 1, 2026. Current students that enrolled in a graduate program for the 2025-2026 year or before may continue to borrow Graduate PLUS Loans for up to 3 more years (2026-2027, 2027-2028, and 2028-2029), or until graduating from their current program of study (whichever comes first).
Parent PLUS Loan Limits
Undergraduate student loans (Subsidized and Unsubsidized) are NOT changing; however, Parent PLUS Loans offered to undergraduate students will have a new annual academic year limit of $20,000, and an aggregate (lifetime) limit of $65,000 beginning July 1, 2026.
Parents who borrowed in 2025-2026 or before can continue to borrow under current limits for 3 years (2026-2027, 2027-2028, and 2028-2029) or until their student graduates—whichever comes first.
New Federal Loan Repayment Plans
For loans disbursed after July 1, 2026, income-driven repayment plans will be replaced by a new Repayment Assistance Program (RAP). Borrowers of loans disbursed after July 1, 2026 will be able to choose RAP or a standard 10-year or 25-year repayment plan.
Borrowers of loans disbursed before July 1, 2026 will have the option to remain in existing income-driven repayment plans (IBR, PAYE, SAVE) but must enroll by June 30, 2028. They will be moved to RAP if they miss this deadline.
Please note that borrowers should contact their loan servicer(s) or review information available from the Department of Education concerning federal loan repayment.
