Significant federal legislative changes under the One Big Beautiful Bill Act (OBBBA) take effect starting with the 2026-2027 academic year. These updates change how your loan amounts are calculated based on your credit hours and place new limits on family borrowing.
Review these updates closely so you understand how these changes may impact you.
1. Proportional Loan Reductions for Less-Than-Full-Time Enrollment
Under the new law, Federal Direct Loans must be reduced proportionally if you are enrolled less than full-time. There are no exceptions to this rule.
The Enrollment Thresholds
| Enrollment Status | Undergraduate Requirement | Graduate Requirement | Loan Status |
| Full-Time | 12+ credits / semester | 8+ credits / semester | Eligible for 100% of your annual loan limit. |
| Three-Quarter / Half-Time | 6 to 11 credits / semester | 4 to 7 credit / semester | Reduced proportionally based on exact credit count. |
| Less than Half-Time | Under 6 credits | Under 4 credits | 0% (Ineligible for disbursement). |
Mid-Semester Changes: Your eligibility can change throughout the year. If you start a semester full-time but withdraw or drop below full-time status later, your loan amount for the following semester may be reduced.
Example 1: (Part-Time Enrollment): You are a first-year dependent undergraduate student. Normally, your maximum full-time annual loan limit is $5,500 ($2,750 per semester). If you register for only 8 credits each semester, your academic year total is 16 credits instead of the required 24 credits:
16 enrolled credits ÷ 24 credits full-time = 66.67%
Your new annual loan limit drops to $3,667 ($1,833 per semester).
Example 2: (The Mid-Semester Drop): You start the fall semester with 16 credits, receive your full sophomore disbursement ($3,250), but later drop 2 classes, ending the semester with 8 credits. In the spring, you register for 12 credits.
Your yearly total is now 20 credits instead of 24, dropping your loan limit to 83.3% ($5,415). Because you already accepted $3,250 in the fall, your spring loan disbursement is automatically reduced to $2,165, leaving you with a higher tuition bill balance.
Note, if you add a fourth class in the spring to reach 16 credits, your yearly total will be 24 credits and restores your full spring funding.
2. Parent PLUS Loan Changes
If your parents use Parent PLUS loans to help fund your undergraduate degree, new caps apply starting July 1, 2026:
- Annual Cap: Limited to $20,000 per student, per academic year.
- Lifetime Cap: Limited to a $65,000 total maximum per dependent student.
Are you a returning borrower? If your parents borrowed a Parent PLUS loan for you before July 1, 2026, they are grandfathered in and can continue borrowing under the old limits for up to 3 more years, or until you complete your current program.
3. Phase-Out of Grad PLUS Loans
If you are pursuing or planning to pursue a graduate degree:
- New Borrowers: Grad PLUS loans are eliminated starting July 1, 2026. No Grad PLUS loans will be issued to new students.
- Current Graduate Students: If you borrowed a Grad PLUS loan before July 1, 2026, you will maintain continuing eligibility only to finish your current degree program.
Next Steps for Students
1. Check Your Registration
Log into your student portal and count your exact registered credits for the upcoming semesters. Ensure you meet the 12-credit undergraduate or 8-credit graduate full-time bars if you require maximum loan limits.
2. Consult Academic Advising Before Dropping Courses
Before withdrawing from a course, contact both your Academic Advisor and the Financial Aid office to calculate the impact that the drop will have on your financial aid.
3. Discuss Parent Limits with Family
If your parent plans to borrow a Parent PLUS Loan to help finance your education, discuss the annual borrowing limit of $20,000 and determine whether additional funding or financing options will be needed to cover your educational costs.