One Big Beautiful Bill Act

Starting with the 26-27 award year, Direct Loan amounts for students who are not full-time for the academic year will need to be adjusted. This is known as a Schedule of Reduction, or SOR adjustment. Full-time is defined as 12 credit hours per semester.

Students who enroll full-time and remain enrolled full-time are eligible to receive the full-time annual loan limit based on their level, class year and dependency status.

Students who enroll at less-than-full-time, or drop below full-time, could now have their federal student loans reduced in direct proportion to their less-than-full-time status. For example, full-time is 24 credit hours in an academic year so if a student enrolls in 18 credit hours for the academic year, the student will receive 75% of their annual loan limit eligibility (18/24 = 75%).

Federal student loans that will be affected by the new loan reduction requirements (SOR):

• Federal Subsidized Loans (undergraduate students)
• Federal Unsubsidized Loans (undergraduate and graduate students)
• Federal Graduate PLUS Loans (only IF eligible for the interim exception for legacy borrowing – see below)

(Federal Parent PLUS Loans are not subject to reduction for less than full-time enrollment.)

How can I avoid any adjustments to my loans?
Stay at full time enrollment each semester (12 or more credit hours)! If you drop a course in fall, you can add courses to spring to keep the same loan eligibility if your total credits between fall and spring total 24 or more.

What happens if I drop or withdraw from a class(s) after my loan is awarded?
Your loan may be adjusted based on your updated enrollment. This could affect future disbursements.  If you withdraw from classes during fall this can affect your spring eligibility.

• There are new annual and aggregate limits for Parent PLUS Loans 
• Effective July 1, 2026, Federal Direct Parent PLUS loans will be capped at $20,000 per student per year, with a $65,000 lifetime limit per dependent student
• Interim Exception for Legacy Borrowers – See below 

• The bill has eliminated the Federal Direct Graduate PLUS Loan program for students beginning a new graduate program on or after July 1, 2026
• Interim Exception for Legacy Borrowers – see below

Parent borrowers are not subject to the new loan limits for Parent PLUS Loans and graduate students may continue to borrow Grad PLUS Loans if it is determined they meet the criteria for the Interim Exception for Legacy Borrowers:

• May borrow for up to three academic years or the remainder of their expected time to credential, whichever is less, IF they remain continuously enrolled in the same program of study at the same institution as they were enrolled as of June 30, 2026 and for whom a Direct Loan was made for that program of study prior to July 1, 2026.