Changes to 2026-2027 Federal Student Loans

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The One Big Beautiful Bill Act (OBBB), signed in 2025, brings major changes to federal student aid starting July 1, 2026 for the 2026-27 academic year. This legislation includes new federal loan limits, along with changes to repayment options and eligibility that may impact how students and families pay for college.

Please review this message carefully, as it outlines how the new rules may apply to you.

Important Notes

  • The information provided below is meant to help students understand the evolving federal student loan landscape. Although it reflects our informed understanding of current federal guidelines, students are encouraged to consult official federal sources for authoritative guidance. We will continue to keep you informed as new guidance becomes available.
  • For the purposes of these changes:
    • Federal Direct Loans include subsidized, unsubsidized, Parent PLUS and Graduate PLUS loans
    • DVM students are classified as Professional Students

Key Changes

1. Elimination of the Graduate PLUS Loan Program: Beginning July 1, 2026, the Federal Graduate PLUS Loan program will be discontinued for new borrowers.

Legacy Provision: Students who received at least one Direct Loan (Direct Unsubsidized or Graduate PLUS) for the same program before July 1, 2026 and remain enrolled at CSU in that program may continue borrowing $20,500 of Direct Unsubsidized Loans and Graduate PLUS Loans up to the full cost of attendance for up to three additional years or until the end of their program, whichever comes first.

2. New Annual and Aggregate Loan Limits for New Borrowers AFTER June 30, 2026: Students who have not received a Direct Unsubsidized Loan disbursement before July 1, 2026 (“new borrowers”), will be subject to the following new Direct Unsubsidized Loan limits:

  • Annual and Aggregate lifetime limits (does not include amounts borrowed as an undergraduate):
    • Graduate Students: $20,500 annual; $100,000 aggregate
    • Professional Students: $50,000 annual; $200,000 aggregate
    • Combined graduate + professional borrowing: capped at $200,000
    • A separate lifetime limit of $257,500 applies to all federal student loans (excluding Parent PLUS loans borrowed on your behalf)

Legacy Provision: Students who received at least one Direct Loan (Direct Unsubsidized or Graduate PLUS) for the same program before July 1, 2026 and remain enrolled at CSU in that program can continue borrowing the current Unsubsidized Direct Loan amount of $20,500 and Graduate PLUS Loans up to the full cost of attendance for up to three additional years or program completion, whichever comes first.

3. New Parent PLUS Loan Borrowing Limits: Parents of dependent undergraduate students who borrow a Parent PLUS Loan on or after July 1, 2026 may borrow up to $20,000 per year per student with an aggregate lifetime limit of up to $65,000 per student.

Legacy Provision: Students who already borrowed at least one Direct Loan or had a Federal Parent PLUS Loan borrowed for them prior to July 1, 2026, may continue to borrow for up to three additional years or until program completion, whichever comes first.

4. Proration of Loans Based on Full-Time or Part-Time Enrollment: Beginning July 1, 2026, borrowers enrolled less than full-time will only be able to borrow an amount proportional to their enrollment status. Parent PLUS loans for undergraduates are exempt from this change. 

Legacy Provision for Loan Eligibility

To be eligible under the legacy provisions included in OBBB, a student—or a parent in the case of Parent PLUS Loans—must have received a Federal Direct Loan with a disbursement date prior to July 1, 2026. Students who change their program of study or who cease to be enrolled will no longer qualify for these legacy provisions and will instead be subject to the borrowing limits established under the OBBB legislation.

A student can lose their Legacy borrower status if they:

  • Exceed the length of their program
  • Withdraw from all classes in a semester
  • Take a leave of absence or withdraw from the University
  • Change a degree program

Legacy eligibility under these rules extends for up to 3 academic years or program completion, whichever comes first. The 2028-2029 academic year is the last year a student may qualify under the legacy provision.

New Federal Repayment Option

Loans disbursed after July 1, 2026, will be repaid under either a standard repayment plan or the Repayment Assistance Plan (RAP).

Other Ways to Pay for College

 

Aggie

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