Regulatory Updates

Financial Aid Changes for 2026–27

On July 4, 2025, H.R. 1 – Public Law No. 119–21, known as the “Big Beautiful Bill,” was signed into law. This legislation makes significant changes to how students and families finance higher education. Key provisions include the elimination of the Grad PLUS Loan Program, the introduction of new annual and lifetime borrowing limits, modifications to federal grant and loan programs, and a reduction in repayment options for new borrowers.

The U.S. Department of Education has not yet released the formal regulations that will clarify how these changes will be implemented. The summary below outlines what is currently known—as well as what remains uncertain—about how this law may impact financial aid starting in the 2026–27 academic year.

At this time, please note:

• Financial aid for the 2025–26 academic year will remain unchanged.
• Students who begin a new graduate program before July 1, 2026, will continue to be eligible for Federal Direct Graduate PLUS (GradPLUS) Loans under existing regulations.
• Students who begin a new graduate program on or after July 1, 2026, may apply for student loans through federal and private lending options. SEU plans to launch additional resources outlining the process for reviewing and selecting available loan options.

Recent Updates: Student Loan Changes for the 2026–27 Academic Year

Federal Direct Graduate PLUS Loans Will Be Phased Out

Starting July 1, 2026, new graduate and professional students will no longer be eligible to borrow Federal Direct Graduate PLUS (GradPLUS) Loans.

Students who are currently enrolled and borrowed a GradPLUS Loan prior to that date may continue to receive GradPLUS funding for up to three additional years or until they complete their current program—whichever occurs first.

This extended eligibility applies only to the student’s existing program of study. Students who begin a new program on or after July 1, 2026, will not have access to GradPLUS Loans for that program.

New Graduate Loan Borrowing Limits

Effective July 1, 2026:

• Professional students (such as those enrolled in medicine, law, or other licensure-based programs) may borrow up to $50,000 per year, with a $200,000 lifetime limit in Federal Direct Unsubsidized Loans.
• All other graduate studentsmay borrow up to $20,500 per year, with a $100,000 lifetime limit.

Students currently enrolled who are borrowing Unsubsidized or GradPLUS Loans in their existing program may retain their current borrowing limits for up to three additional years or until they complete their program.

In late November, the Department of Education released proposed definitions clarifying which programs qualify as “professional degree” programs—an area that was previously unclear when the legislation was enacted in July 2025. While these definitions may continue to evolve, the initial guidance indicates that the following programs are now classified as graduate (not professional) programs.

As a result, some professional programs remain eligible for federal aid but do not qualify for the higher federal loan limits.

Undergraduate Loan Policies Remain the Same

Federal undergraduate loan limits and Pell Grant eligibility are not changing.

However, beginning July 1, 2026, Parent PLUS Loans will be capped at:

• $20,000 per student per year, and
• $65,000 lifetime limit per student.

Parents who borrowed before July 1, 2026, may continue borrowing under the current limits for up to three additional years or until their student completes their program.

Loan Proration for Part-Time Borrowers

Effective for the 2026-27 academic year

Federal student loan amounts must be prorated based on the number of credits a student attends. If a student does not attend full-time, they are not eligible for the full annual loan limit. Loan amounts will be prorated in direct proportion to the percent of full-time state the student is enrolled in (i.e., if a student attends half-time, they can only receive half of the annual loan amount). Please visit the Office of the Registrar to find enrollment status definitions based on the number of credits.

Note: Half-time enrollment is still required for all federal student loans.

Public Service Loan Forgiveness (PSLF)

There are no changes to PSLF. Borrowers employed in qualifying public service positions may continue to pursue loan forgiveness under the current rules.

Repayment Plan Changes

For loans disbursed on or after July 1, 2026, existing income-driven repayment plans (IBR, PAYE, and SAVE) will be replaced by a new Repayment Assistance Program (RAP).

Key details include:

• Borrowers taking out new loans after July 1, 2026, may choose RAP or a standard 10- or 25-year repayment plan.
• Current borrowers who do not borrow new loans after July 1, 2026, may remain in their existing income-driven repayment plan, but must enroll byJune 30, 2028.
• Borrowers who miss this deadline will automatically be transitioned into RAP.

Repayment Assistance Plan (RAP)

• The Repayment Assistance Plan (RAP), a new income-driven repayment option created through legislation signed on July 4, 2025, is expected to become available to Direct Loan borrowers by no later than July 1, 2026. RAP is not available for Parent PLUS Loans, including related consolidation loans.
• The plan offers a 30-year forgiveness timeline and includes interest subsidies that prevent unpaid interest from increasing your loan balance; additionally, if your monthly payment does not reduce the principal by at least $50, a subsidy will ensure that minimum reduction.
• Monthly payments are based on a percentage of adjusted gross income, with a $50 reduction per dependent, and a minimum payment of $10. A chart is available to help estimate payments based on income and number of dependents.
• Use the Loan Simulator to help in calculating the monthly payment under the PAR plan.

Ongoing Updates

Our office is closely monitoring these developments and will continue updating this page as new information becomes available.

We understand that these changes may feel overwhelming. Please know that we are here to support you and will continue sharing timely updates and guidance as we receive additional details.