2026-27 Updates

Disclaimer: As the Department of Education releases further guidance and finalizes the rules, we will continue to update this page with the most accurate and actionable information available. 

Subsidized and Unsubsidized Loans

• Borrowers will not see any changes to eligibility or lifetime loan limits under the One Big Beautiful Bill Act.

Parent PLUS Loan Annual & Aggregate Limit

• All parents (combined) may borrow $20,000 per year per dependent student and a $65,000 aggregate limit per dependent student (without regard to amounts forgiven, repaid, canceled, or discharged).

• Legacy Provision: If a borrower has a Federal Direct Loan made before July 1, 2026, while the dependent student is enrolled in a credentialed program, the parent can continue to borrow under current loan limits for 3 academic years or the remainder of their dependent student’s expected time to credential, whichever is less. The student must remain enrolled in the current plan of study with continuous enrollment, so if a student withdraws or stops out for a semester they will no longer be under the legacy provisions.

Loan Proration 

• Students enrolled less than full-time (full-time = 12 credit hours for undergraduate students) will have their federal loans prorated to match their enrollment.
  • For example: A student who is enrolled with 6 credits in Fall and 6 credits in Spring is enrolled 50% each term. Their loans will be prorated to 50% of their annual eligibility. If the student is eligible for $5,500 ($2,750 per term) at full-time for the two semesters combined, then their prorated amount will be reduced to $2,750 ($1,375 per term) to reflect their half-time enrollment.

• This change could have an effect on students withdrawing from classes after aid disbursed as aid may have to be adjusted for future semesters.

Graduate PLUS Loan Program

• This program is ending, effective July 1, 2026, and will no longer enroll new borrowers.

• Legacy Provision: If a borrower has a Direct Unsubsidized Loan made before July 1, 2026, while enrolled in a credentialed program, the borrower can continue to borrow from the program for 3 academic years or the remainder of their expected time to credential, whichever is less.

Graduate & Professional Annual & Aggregate Loan Limits

• The annual loan limit is capped at $20,500 for graduate students and $50,000 for professional students (e.g., MED, Law and PharmD). The aggregate loan limit is capped at $100,000 for graduate students and $200,000 for professional students. These amounts do not include amounts borrowed as an undergraduate. (Borrowers who are both graduate and professional students at some point in their educational careers may only borrow up to $200,000 in total for graduate and professional school.)

• Legacy Provision: If a borrower has a Direct Unsubsidized Loan made before July 1, 2026, while enrolled in a credentialed program, the borrower can continue to borrow under current loan limits for 3 academic years or the remainder of their expected time to credential, whichever is less. The student must remain enrolled in the current plan of study with continuous enrollment, so if a student withdraws or stops out for a semester they will no longer be under the legacy provisions.

Loan Proration

• Students enrolled less than full-time (full-time = 10 credit hours for Graduate students) will have their federal loans prorated to match their enrollment.
  • For example: A student who is enrolled with 5 credits in Fall and 5 credits in Spring is enrolled 50% each term. Their loans will be prorated to 50% of their annual eligibility. If the student is eligible for $20,500 ($10,250 per term) at full-time for the two semesters combined, then their prorated amount will be reduced to $10,250 ($5,125 per term) to reflect their half-time enrollment.

• This change could have an effect on students withdrawing from classes after aid disbursed as aid may have to be adjusted for the future semesters.

Foreign Income

• Requires that foreign income be included in the Adjusted Gross Income (AGI) used to calculate Pell Grant eligibility.

Scholarships/Grants that cover full Cost of Attendance

• Students who receive grants or scholarships from non-federal sources covering their entire cost of attendance (COA) are ineligible to receive a Pell Grant, even if otherwise eligible for the program.

Students with a high Student-Aid Index (SAI) 

• Students with a Student-Aid Index (SAI) that exceeds twice the maxiumum Pell Grant award  ($14,790 for 2026-27) are ineligble to receive a Pell Grant.   

Beginning with the 2026-27 academic year, the following assets will be excluded from the Student Aid Index (SAI) calculation and should not be reported as assets on the FAFSA form:

• The net worth of a family-owned business with 100 or fewer full-time (or full-time equivalent) employees.

• The net worth of a farm on which the family resides.

• The net worth of a commercial fishing business and related expenses, owned and controlled by a family. 

Public Service Loan Forgiveness (PSFL)

There are no changes to the Public Service Loan Forgiveness program

New Repayment Plans

• For new loans disbursed after July 1, 2026, the bill eliminates current income-driven repayment plans (IBR, PAYE, SAVE) and replaces them with a new Repayment Assistance Program, or RAP.

• Students who have borrowed loans before July 1, 2026, and will borrow a new loan after July 1, 2026, are limited to the new RAP or the standard plans for the new loan.

• RAP borrowers will not be locked into a 30-year plan. They can switch to a standard plan, which ranges from 10 to 25 years.

• Borrowers with no new loans made on or after July 1, 2026, can continue to be eligible to enroll in the current Standard, current Income Based, or IBR, Graduated, and Extended repayment plans, and could also opt in to the new RAP. Current borrowers enrolled in ICR, PAYE, or SAVE plans must transition to a new repayment plan by July 1, 2028. If no selection is made by that date, they will be moved into RAP.

Additional Resources

Federal Student Aid: One Big Beautiful Bill Updates     

This page was updated on February 20, 2026.