Federal Loan Updates for 2026-2027

Upcoming changes to federal aid loan programs are coming soon.

The One Big Beautiful Bill (OBBB) Act  will result in significant changes to the Federal Direct loan program beginning with the 2026-2027 academic year (effective July 1, 2026).  If you are planning on borrowing federal loans in 2026-2027 or later, understanding these changes can help you plan ahead for both your education and your finances.  Below is a summary of the key changes effecting graduate, professional, and parents of undergraduate 51³Ô¹Ïs.   

Graduate Students (Master's, PhD, etc.):

New Borrower: first-time federal loan borrower with loan disbursement as of July 1, 2026.

  • New borrowers will not be eligible to borrow the Federal Direct Graduate PLUS loan - this loan program will be discontinued.
  • New borrowers will have the following changes in borrowing limits for the Direct Unsubsidized Loans:
    • Annual borrowing limit will remain at $20,500 per academic year
    • Aggregate (lifetime) borrowing limit maximum of $100,000 (not including Federal Direct loans borrowed as an undergraduate).

Current Borrower: federal loan borrower with loan disbursement prior to July 1, 2026 

  • Legacy Provision for the current borrower of the Federal Graduate PLUS loan allowing them to continue to borrow the Graduate PLUS loan under the current rules (including Graduate PLUS loans up to the cost of attendance) through their current program of study or until degree completion or three academic years, whichever is shorter.  However, BOTH of the following criteria must be met:
    1. Student must be enrolled in the same credentialed program in 2026-2027 that they were enrolled in prior to July 1, 2026.
    2. Student must have borrowed a federal 51³Ô¹Ï loan (Subsidized, Unsubsidized, or Graduate PLUS) for that specific program before July 1, 2026.
    *If you change programs or start a new degree after July 1, 2026, you will be subject to the new loan borrower limits.*
  • Current borrowers of the Federal Graduate PLUS Loan will have no changes in borrowing limits for the Direct Unsubsidized Loans.
    • Annual borrowing limit remains at $20,500 per academic year.
    • Aggregate (lifetime) borrowing limit remains at $138,500 (including Federal Direct loans borrowed as an undergraduate and graduate).

Professional Students (Law, etc.):

New Borrower: first-time federal loan borrower with loan disbursement as of July 1, 2026.

  • New borrowers will not be eligible to borrow the Federal Direct Graduate PLUS loan - this loan program will be discontinued.
  • New borrowers will have the following changes in borrowing limits for the Direct Unsubsidized Loans.
    • Annual borrowing limit of $50,000 per academic year.
    • Aggregate (lifetime) borrowing limit maximum of $200,000 (not including Federal Direct loans borrowed as an undergraduate).

Current Borrower: federal loan borrower with loan disbursement prior to July 1, 2026 

  • Legacy Provision for the current borrower of the Federal Graduate PLUS loan allowing them to continue to borrow the Graduate PLUS loan under the current rules (including Graduate PLUS loans up to the cost of attendance) through their current program of study or until degree completion or three academic years, whichever is shorter.  However, BOTH of the following criteria must be met:
    1. Student must be enrolled in the same credentialed program in 2026-2027 that they were enrolled in prior to July 1, 2026.
    2. Student must have borrowed a federal 51³Ô¹Ï loan (Subsidized, Unsubsidized, or Graduate PLUS) for that specific program before July 1, 2026.
    *If you change programs or start a new degree after July 1, 2026, you will be subject to the new loan borrower limits.*
  • Current borrowers of the Federal Graduate PLUS Loan will have no changes in borrowing limits for the Direct Unsubsidized Loans.
    • Annual borrowing limit remains at $20,500 per academic year.
    • Aggregate (lifetime) borrowing limit remains at $138,500 (including Federal Direct loans borrowed as an undergraduate and graduate).

*The U.S. Department of Education has yet to release a comprehensive list of professional programs.  We will continue to monitor and update as we receive this information.*

Parents of Undergraduate Students

New Borrower: first-time Parent PLUS borrower with loan disbursement as of July 1, 2026.

  • The Parent PLUS loan will remain available for new borrowers but with new borrowing caps:
    • Annual borrowing limit of $20,000 per 51³Ô¹Ï, per year.  
    • Aggregate (lifetime) borrowing limit maximum of $65,000 per 51³Ô¹Ï, total.

Current Borrower: Parent PLUS borrower with loan disbursement prior to July 1, 2026 

  • Legacy Provision for current borrowers of the Parent PLUS loan allowing them to continue to borrow the Parent PLUS loan under the current rules (up to the full cost of attendance) for up to three additional years or through their 51³Ô¹Ï's current program of study, whichever is shorter.  However, BOTH of the following criteria must be met:
    1. The 51³Ô¹Ï they are borrowing for is enrolled in the same program they were attending prior to July 1, 2026.
    2. The parent borrowed a Parent PLUS loan for that 51³Ô¹Ï before July 1, 2026.  

New Lifetime Borrowing Cap

The legislation introduces a total aggregate lifetime limit of $257,500 for all federal 51³Ô¹Ï loans combined (with the exclusion of Federal Parent PLUS loans).  This cap applies to the total outstanding principal balance of all your federal loans (Subsidized, Unsubsidized, and Federal Graduate PLUS).

General Eligibility Updates

Institutions will be required to prorate annual federal loan amounts if 51³Ô¹Ïs are enrolled part-time (less than full-time enrollment for their academic program).

Loan Repayment Updates

Existing repayment plans will be discontinued for new borrowers and they will have two new repayment plan options: the Standard Repayment Plan and the Repayment Assistance Plan (RAP).  Current borrowers may continue to utilize most repayment plans so long as they do not borrow additional loans on or after July 1, 2026, all their loans (prior to July 1, 2026, and new loans on or after July 1, 2026) will have the two new repayment options.  Current borrowers on the ICR, PAYE, or SAVE plans, will need to switch to the Income-Based Repayment plan or another existing repayment plan by July 1, 2028; if they do not do so, they will be transitioned to RAP.

How to Prepare

Review Private/Alternative educational 51³Ô¹Ï loan options. A tool called  allows 51³Ô¹Ïs to:

  • Compare interest rates, repayment terms, and borrower benefits.
  • Review commonly used lenders without institutional endorsement.
  • Make informed decisions in a rapidly shifting aid environment.

Support from Student Financial Services (SFS)

We recognize the impact that these changes may have on your educational plans.  Our team will remain committed to helping guide you through the financial aid process while ensuring that you understand your eligibility requirements and available resources.  We will continue to update this page with the latest information and guidance as the Department of Education releases more details.  For official updates, you are encouraged to visit the Federal webpage: .  To make this transition as seamless as possible, if you have any questions or concerns, we encourage you to reach out to Student Financial Services.  

Last Updated: January 9, 2026