One Big Beautiful Bill Act and Federal Student Aid

Key change: SOR Schedule of Reductions (loan proration) by enrollment status

Effective date: This applies to all federal loans processed for the 2026-2027 aid year.  At the University of Massachusetts Dartmouth this means all loans starting with the Fall 2026 semester.

One of the most important changes under OBBBA is the requirement that federal loan eligibility must be prorated based on a student’s enrollment status:

• Students enrolled less than full-time (less than 12 credits for Undergraduate and Law and less than 9 credits for Graduate) will have their annual loan limits reduced proportionally based on the percentage of the full-time enrollment.
• For example, a half-time student (6 credits for Undergraduate and/or 4.5 credits for Graduate) will receive only 50% of their annual loan limit.

This change affects both undergraduate, graduate, and law school borrowers and replaces prior practice where less than full-time enrollment might not have reduced loan eligibility the same way.

Undergraduate student loans

Undergraduates will still have access to Federal Direct Subsidized and Unsubsidized Loans.

What stays the same

• Annual and aggregate loan limits remain the same (although undergraduate loans will count toward the new lifetime limits).
• Undergraduates will still have access to Federal Direct Subsidized and Unsubsidized Loans.

What’s new

• Annual loan amounts are adjusted down if enrolled less than full-time.
• Other loan types like the Federal Parent PLUS Loan now have new caps (see below).
• Loan amounts that have been repaid, forgiven, or otherwise discharged will now count toward lifetime loan limits.

Graduate loans

Effective Date: July 1, 2026, for new borrowers who have not previously borrowed a direct loan in their current course of study.  Also applies to many continuing graduate students who have been in their program for two or more years.

OBBBA has major changes for graduate student borrowing.

Graduate students

• Graduate PLUS Loans will no longer be available for new borrowers as of July 1, 2026*.
• Graduate students will be limited to Direct Unsubsidized Loans with:
  • Annual limit: $20,500
  • Aggregate limit: $100,000 (not including Undergraduate borrowing)
• Loan amounts are prorated for less than full-time enrollment (9 graduate credits).

*Legacy provision

A student can continue to borrow from the Graduate PLUS Loan program if:

1. The student has a Federal Direct Loan disbursed before July 1, 2026, while enrolled in a credentialed program of study, and
2. The student is enrolled in the same credentialed program, and
3. The student has not withdrawn or had interrupted enrollment in their course of study

Under these conditions, and assuming all other eligibility requirements are met, the student may continue to borrow from the Graduate PLUS Loan as long as their total enrollment in the program does not exceed the shorter of 3 years or the published length of the pogram.

Federal Parent Plus Loans

Effective Date: July 1, 2026, for new students. This is also Effective July 1, 2026, for continuing students who have not previously borrowed a direct loan for their course of study or who have been in their program for 3 or more years.

Federal Parent PLUS loans will now be capped at:

• $20,000* per year per dependent student
• $65,000** lifetime per dependent student

These caps are new, replacing the prior ability to borrow up to the full cost of attendance without a lifetime limit.

*Limits apply to all parents of a student, regardless of whether one or more parents are borrowing on a student’s behalf.

** Legacy provision:

A parent can continue to borrow funds from the Parent PLUS Loan program exceeding these limits if:

1. The student has a Federal Direct Loan disbursed before July 1, 2026, while the dependent student was enrolled in a credentialed program of study, and
2. The student is enrolled in the same credentialed program.

Under these conditions, a parent may continue to borrow from the Parent PLUS Loan program for 3 academic years or until their dependent student reaches the end of their program of study, whichever comes first.

New lifetime borrowing cap

All Federal student loan borrowing (excluding Federal Parent PLUS loans) will be subject to a combined lifetime cap of approximately $257,500 across all loan types— a first under federal law.

Federal Pell Grant eligibility

Students will no longer be eligible for a Pell Grant if their Student Aid Index (SAI) exceeds twice the maximum Pell award for a given year. For the 2026-2027 academic year, with a maximum Pell award of $7,395, any applicant with an SAI of $14,790 or higher will be ineligible for Pell Grant funding.

Students who receive grants or scholarships from non-federal sources covering their entire COA are ineligible to receive a Pell Grant, even if otherwise eligible for the program.

School of Law

These changes also affect our Law Students:

• Graduate PLUS loans: The Law eliminates the Graduate PLUS program, effective July 1, 2026, with legacy provisions for current borrowers to complete their program of study.
• Loan limits: The OBBBA designates a student enrolled in a J.D. degree program as a professional student and caps the annual loan limit at $50,000. The aggregate limit for professional students is $200,000.
• Lifetime borrowing cap on all federal loans: The law contains a $257,500* borrowing cap on all federal student loans, excluding borrowed Parent PLUS loan amounts.

Learn more about the details pertaining to our Law School.