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Federal Student Aid Changes Starting July 1, 2026

Recent Updates:

The OBBBA [PDF] was signed into law on July 4, 2025.

The Department of Education released final regulations regarding Federal Student Loan Program changes on May 1, 2026.

This legislation impacts Federal Student Aid programs, including Federal Student Loan repayment plans, Federal Student Loan limits, Federal Parent PLUS Loans, and Federal Graduate PLUS Loans. These changes are effective on July 1, 2026.

For students entering college, changing programs, or exceeding their program’s published length (see glossary below for program length) after July 1, 2026:

  • The bill establishes new annual and aggregate loan limits for graduate and professional students and a new lifetime maximum borrowing limit.
  • The bill requires institutions to proportionately offer loans based on enrollment for students who attend less-than-full-time.
  • The bill has eliminated the Federal Direct Graduate PLUS Loan for periods of instruction that begin on or after July 1, 2026, as well as for continuing students who do not meet the eligibility requirements for the interim exception.
  • The bill has set the maximum Federal Direct Parent PLUS Loan at $20,000 per dependent student, per year, and set the aggregate limit per dependent student at $65,000 for students entering or changing programs in fall 2026 and beyond.
    • This Parent PLUS Loan aggregate limit applies without regard to any amounts repaid, forgiven, canceled, or otherwise discharged on any such loan.

Interim Exception – Legacy Provisions:

Legacy provisions (“grandfather provisions” or “grandfathering”) are in place for some existing student and parent borrowers to maintain eligibility under prior loan limits.

  • Parent PLUS Loan Borrowers – Legacy Eligibility Based on Prior Borrowing for Each Specific Student:
    • To qualify for the legacy provision, a student must meet all of the following criteria:
      • The student was enrolled in a program of study** before July 1, 2026.
      • They had a federal student loan for that program of study disbursed before July 1, 2026. 
      • Legacy provisions for Parent PLUS borrowers are specific to each student*, who must have been enrolled for a program of study** before July 1, 2026.
      • This legacy provision allows them to continue borrowing from the program for:
        • Three academic years; or
        • the expected time to credential, the period determined by calculating the difference between—
          (i) the program length for a full-time student to complete the program of study in which the individual is enrolled; and
          (ii) the period of such program of study that such individual has completed as of the date of the determination
        • whichever is less. 
      • If the student ceases enrollment or withdraws from the university and does not re-enroll in their program of study before June 30, 2026, the legacy status no longer applies, and the new limits take effect immediately. (Please see glossary definition of “enrollment.”)

*Legacy provisions do not apply to other dependent students, unless they were also enrolled in a program of study as of June 30, 2026, and received a loan or a loan was received on their behalf for that program of study**.

  • Graduate PLUS Loan Borrowers – Legacy Eligibility Based on Academic Program and Prior Borrowing:
    • To qualify for the interim legacy exception, a graduate or professional student must meet all of the following criteria:
      • They were enrolled in the same credentialed program*** before July 1, 2026.
      • They had a federal student loan for that specific program disbursed before July 1, 2026. 
      • This interim legacy exception allows them to continue borrowing from the program for:
        • Three academic years; or
        • the expected time to credential, the period determined by calculating the difference between—
          (i) the program length for a full-time student to complete the program of study in which the individual is enrolled; and
          (ii) the period of such program of study that such individual has completed as of the date of the determination
        • whichever is less. 
      • If the student ceases enrollment or withdraws from the university and does not re-enroll in their program of study before June 30, 2026, the legacy status no longer applies, and the new limits take effect immediately. (Please see glossary definition of “enrollment.”)

We will post important updates and clarifications to these legacy provisions as detailed information becomes available from the Department of Education.

Glossary

Aggregate = The maximum amount of loan that can be borrowed during a specific academic career or period of time.  

Dependent Student = A dependent student is someone whose parent(s) information is required on the FAFSA based on the dependency status questions asked on the FAFSA.

Enrollment = We are still waiting for the final rules on what counts as “enrollment.” However, students should operate under the assumption that “enrollment” means both registration and attendance in a course.

Graduate PLUS Loan = is a type of federal student loan for eligible graduate and professional students. It is a credit-based loan, and it is not based on the student’s financial need. Students can borrow up to the cost of attendance, minus any other aid the student is receiving.

Legacy = A legacy provision in federal student aid refers to rules that allow students or parents with specific eligibility to continue receiving aid or borrowing federal loans under older criteria, even if the criteria have since changed.

Parent PLUS Loan = is a federal loan that the parent(s) of a dependent undergraduate student can borrow to help pay for their child’s education. It is a credit-based loan, not based on the student’s or family’s financial need. Parents can borrow up to the cost of attendance, minus any other aid the student is receiving.

Subsidized Loan = is a type of loan where the government pays the interest on the loan while the borrower is in school at least half-time, during a grace period, and during periods of deferment.

Unsubsidized Loan = is a type of loan where the interest accrues during the period of enrollment, during the grace period, and during deferment.

**Program of Study – Undergraduate: For students enrolled in an undergraduate program and who had a federal student loan disbursed prior to July 1, 2026, the program of study refers to their credential level at Syracuse University.

  • If a student enrolled in a bachelor’s program at Syracuse University before July 1, 2026, they may maintain legacy status during the course of their bachelor’s program (even if they change their major).
  • Similarly, if a student enrolled in an associate’s degree program at Syracuse University before July 1, 2026, they may maintain legacy status during the course of their associate’s degree program, but will not be granted legacy status if they change to a bachelor’s degree program.
  • If a student enrolled in an associate’s or bachelor’s degree program at Syracuse University before July 1, 2026, and the student transfers out of Syracuse University, they will not maintain legacy status at their new institution.

***Program of Study- Graduate/Law: For students enrolled in a graduate or professional program and who had a federal student loan disbursed prior to July 1, 2026, the program of study refers to their specific academic program at Syracuse University.

  • Example: If a student enrolled in an MBA program at Syracuse University before July 1, 2026, they may maintain legacy status if they remain in that MBA program.
  • However, if the student was enrolled in the MBA program at Syracuse University before July 1, 2026, and they change their graduate program to an M.S. in Psychology, or if the student transfers out of Syracuse University’s MBA program into another university’s MBA program, they will not maintain legacy status.