2026-27 Changes to Federal Loans
Significant changes to federal financial aid programs were recently signed into law and are effective beginning July 1, 2026.
The below information reflects the most current guidance available and is subject to change as official guidance is released by the Department of Education.
Part-Time Enrollment and Loan Eligibility
Beginning with the 2026-2027 academic year, Federal Direct Subsidized, Unsubsidized, and Graduate PLUS Loans are required to be reduced for students enrolled less than full-time. Loans will be reduced proportionally based upon enrolled credit hours. Students must still be enrolled at least half-time to be eligible for a disbursement.
Undergraduate Less than Full-time Enrollment
An undergraduate student is typically expected to take 12 or more credits a semester for a total of 24 or more credits during the fall/spring academic year. A student enrolled in 12+ credits during the fall semester would be eligible for 50 percent of the annual loan limit. A student who enrolls in six credits for the fall semester would be eligible for 25 percent of the annual loan limit for the semester, for example.
| Undergraduate Enrollment | estimated Percent of the annual loan limit |
|---|---|
| 12+ | 50.00% |
| 11 | 45.83% |
| 10 | 41.67% |
| 9 | 37.50% |
| 8 | 33.33% |
| 7 | 29.17% |
| 6 | 25.00% |
| 5-1 | 0% |
Graduate Less than Full-time Enrollment
A graduate student is typically expected to take nine credits a semester for a total of 18 credits during the fall/spring academic year. A student enrolled in nine credits during the fall semester would be eligible for 50 percent of the annual loan limit for the fall. A student who enrolls in six credits for the fall semester would be eligible for 33.3 percent of the annual loan limit for the semester, for example.
| Graduate Enrollment | estimated Percent of the annual loan limit |
|---|---|
| 9+ | 50.00% |
| 8 | 44.44% |
| 7 | 38.89% |
| 6 | 33.33% |
| 5 | 27.78% |
| 4-1 | 0% |
Parents of Undergraduate Students
Effective July 1, 2026, first-time Parent PLUS Loan borrowers have new annual and aggregate (lifetime) loan limits. Parent PLUS Loans are available as an option to parents of dependent undergraduate students. Careful consideration should be given to how much PLUS loan a parent plans to borrow each year to avoid exhausting PLUS loan eligibility prior to degree completion.
| Parent plus loan | updated limits |
|---|---|
| Annual Loan Limit | new annual loan limit of $20,000 per student |
| Aggregate Loan Limit | new aggregate loan limit of $65,000 per student |
An exception exists to allow Parent PLUS borrowers to borrow under the previous limits—called the legacy provision. Qualifications for this exception are as follows:
- Student is enrolled as of June 30, 2026,
- Student or their parent(s) previously borrowed a federal loan, and
- Student maintains continuous enrollment in an undergraduate degree-seeking program of study through graduation, or up to three years (2026-27, 2027-28, and 2028-29), whichever occurs first.
- For example, an undergraduate student in a four-year program who has been continuously enrolled for three years of the program prior to 2026-27, will be eligible under the legacy provision for only one additional year.
Students will lose eligibility for legacy provision if they withdraw from or are not continuously enrolled in any fall or spring term. For example, if a student is enrolled through fall 2027, but does NOT enroll in spring 2028, they would not be eligible for "legacy” loan limits when returning to their program in fall 2028.
Graduate Students
As of July 1, 2026, the Graduate PLUS Loan program for graduate and professional students will be eliminated for all new borrowers.
Graduate student borrowers have new aggregate (lifetime) loan limits, as well. The aggregate borrowing amount of Federal Direct Unsubsidized Loans is $100,000 per graduate student.
| Annual limit | aggregate limit |
|---|---|
| $20,500/year | $100,000 lifetime (not including loans borrowed at the undergraduate level) |
An exception exists to allow students to continue to borrow the Graduate PLUS Loan and to fall under prior, aggregate borrowing limits. Qualifications for the legacy provision exception are as follows:
- Student is enrolled as of June 30, 2026,
- Student previously borrowed a federal loan for their current program of study, and
- Student maintains continuous enrollment in the same program of study through the remaining length of their program.
For example, if a graduate student is in a two-year program and was continuously enrolled for one year of the program prior to 2026-27, the student will be eligible under the legacy provision for only one additional year.
Students will lose eligibility for legacy provision if they withdraw from or are not continuously enrolled in any fall or spring term. For example, if a student is enrolled through fall 2026, but does NOT enroll in spring 2027, they would not be eligible for "legacy” loan limits when returning to their program in fall 2027.
UIS Financial Assistance is tracking changes and will update this website as new information or official guidance from the Department of Education becomes available. These changes are a result of HR 1 – Public Law No. 119–21, OBBBA (One Big Beautiful Bill Act).
Please Visit Federal Student Aid (FSA) for the Latest Updates
Last updated: March 30, 2026