Staying informed about financial aid policy shouldn't be a challenge. Our office monitors new legislation to provide you with clear, accurate summaries of how these changes might impact your aid. Check this page often for the latest updates and resources directly from the U.S. Department of Education.
What Is Changing on July 1, 2026
The was signed on July 4, 2025, and includes significant reform to Federal Student Aid programs. These changes may affect how much you can borrow and which federal loan programs are available to you.
You should review this information if you:
- Receive Title IV (TIV) Federal Aid (Federal Pell Grant and/or Federal Direct Loans)
- Plan to change academic programs or institutions
The new law introduces several key structural changes to the federal loan landscape and the Pell Grant:
- Less-Than-Full-Time Loan Reduction: The College will be required to adjust the annual loan limit for borrowers enrolled less-than-full-time.
- Parent PLUS: Changes include new annual and aggregate parent PLUS Loan limits for new borrowers.
- Federal Pell Grant Eligibility: Students are ineligible for Pell if their cost of attendance is fully covered by non-federal sources or if their Student Aid Index (SAI) is over twice the maximum Pell Grant.
- Federal Loan Repayment Plans: Reduces the number of repayment plan options to a single income-based plan, RAP, and an updated Standard Repayment Plan.
- Institutional Accountability: The Department of Education now monitors "Gainful Employment for All."
Less-Than-Full-Time Loan Reduction
Prior to the 2026鈥�2027 award year, you may have been eligible for the maximum annual loan limit for your academic year. Effective July 1, 2026, your loan eligibility will be determined in part by your enrollment status. Students enrolled less-than-full-time will have their loan eligibility reduced proportionally to their level of enrollment.
Effective July 1, 2026, new federal regulations update how loan amounts are calculated for enrolled students. While long-standing rules requiring minimum half-time enrollment (at least 6 credit hours) for loan eligibility remain in effect, the new Schedule of Reduction (SOR) framework adjusts loan limits proportionally based on your exact course load. Students enrolled less than full-time will receive reduced loan amounts matched to their enrolled credits.
Here is how the Schedule of Reduction works:
- Based on Class Load: Your loan amount is adjusted down to match your exact course load relative to full-time status (rounded to the nearest whole percentage). Keep in mind that withdrawing from a course can also affect your eligibility for future loans.
- Two Formulas: There are two different formulas used to figure out your exact reduction, depending on whether you are enrolled for a full school year or part of a school year.
- Final Loan Amount: The final amount calculated after applying this percentage reduction becomes your new loan limit that is distributed equally for the terms of enrollment. This determines the total loan amount sent to help cover your school costs
Examples of How SOR Works
Less Than Full-Time Enrollment
The student is considered a second-year dependent student who is eligible for both Direct Subsidized and Unsubsidized loans. Full-time enrollment is 12 credits per quarter (fall, winter, and spring), defining full-time enrollment for the academic year as 36 credit hours (12 x 3 = 36). The student鈥檚 enrollment is nine credits for fall, eight credits for winter, and nine credits for spring.
Direct Subsidized Loan
Maximum Subsidized Direct Loan Annual Limit for AY: $4,500
SOR Percentage: 26 / 36 = 72% (.7222222222 rounded to the nearest whole percentage)
= $3,240
| Metrics | Term | ||
|---|---|---|---|
| Fall | Winter | Spring | |
| Enrolled Credits | 9 | 8 | 9 |
| Disbursement | $1,080 ($3,240 / 3) | $1,080 ($3,240 / 3) | $1,080 ($3,240 / 3) |
Direct Unsubsidized Loan
Maximum Subsidized Direct Loan Annual Limit for AY: $2,000
SOR Percentage: 26 / 36 = 72% (.7222222222 rounded to the nearest whole percentage)
= $1,440
| Metrics | Term | ||
|---|---|---|---|
| Fall | Winter | Spring | |
| Enrolled Credits | 9 | 8 | 9 |
| Disbursement | $480 ($1,440 / 3) | $480 ($1,440 / 3) | $480 ($1,440 / 3) |
Summer Term Optional
The student attends during the summer term, which is optional because it is not required for their program. Optional summer hours are included in the total enrolled credit hours, but standard academic-year credit hours remain at 36 credit hours.
The student is considered a second-year independent student eligible for a Subsidized Loan only. The student enrolls in eight credit hours for summer, 12 credit hours for fall, eight credit hours for winter, and eight credit hours for spring.
Direct Subsidized Loan
Maximum Subsidized Direct Loan Annual Limit for AY: $4,500
SOR Percentage: 36 / 36 = 100% (SOR does not apply)
| Metrics | Term | |||
|---|---|---|---|---|
| Summer | Fall | Winter | Spring | |
| Enrolled Credits | 8 | 12 | 8 | 8 |
| Disbursement | $1,125 ($4,500 / 4) | $1,125 ($4,500 / 4) | $1,125 ($4,500 / 4) | $1,125 ($4,500 / 4) |
Summer Term Required for Program
If a program requires summer attendance--such as Diagnostic Imaging--the academic year shifts to four terms: summer, fall, winter, and spring. For these programs, full-time status requires completing 48 credit hours across the full academic year. The student鈥檚 enrollment is nine credits for summer, nine credits for fall, 12 credits for winter, and 12 credits for spring.
Direct Subsidized Loan
Maximum Subsidized Direct Loan Annual Limit for AY: $2,000
SOR Percentage: 39 / 48 = 81% (.8125 rounded to the nearest whole percentage) = $1,620
| Metrics | Term | |||
|---|---|---|---|---|
| Summer | Fall | Winter | Spring | |
| Enrolled Credits | 9 | 9 | 9 | 12 |
| Disbursement | $405 ($1,620 / 4) | $405 ($1,620 / 4) | $405 ($1,620 / 4) | $405 ($1,620 / 4) |
Less Than Half-Time Enrollment
The student is taking nine credits in fall, three in winter, and nine in spring. While federal rules require at least half-time status (six credit hours) for loan eligibility, the three winter credits are still factored into the overall Schedule of Reduction (SOR) percentage. Because of this, the final loan amount will be split equally between the fall and spring disbursements.
Direct Subsidized Loan
Maximum Subsidized Direct Loan Annual Limit for AY: $4,500
SOR Percentage: 21 / 36 = 58% (.583333 rounded to the nearest whole percentage) =
$2,610
| Metrics | Term | ||
|---|---|---|---|
| Fall | Winter | Spring | |
| Enrolled Credits | 9 | 3 | 9 |
| Disbursement | $1,305 ($2,610 / 2) | $0 (not half-time) | $1,305 ($2,610 / 2) |
Enrollment Decrease After Disbursement
The student is considered a second-year dependent student who is eligible for both Direct Subsidized and Unsubsidized loans. The student鈥檚 enrollment is 12 credits for fall, 12 credits for winter, and 12 credits for spring.
Direct Subsidized Loan
Maximum Subsidized Direct Loan Annual Limit for AY: $4,500
SOR Percentage: 36 / 36 = 100% (SOR does not apply)
| Metrics | Term | ||
|---|---|---|---|
| Fall | Winter | Spring | |
| Enrolled Credits | 12 | 12 | 12 |
| Disbursement | $1,500 ($4,500 / 3) | $1,500 ($4,500 / 3) | $1,500 ($4,500 / 3) |
Direct Unsubsidized Loan
Maximum Subsidized Direct Loan Annual Limit for AY: $2,000
SOR Percentage: 36 / 36 = 100% (SOR does not apply)
| Metrics | Term | ||
|---|---|---|---|
| Fall | Winter | Spring | |
| Enrolled Credits | 12 | 12 | 12 |
| Disbursement | $667* ($2,000 / 3) | $667* ($2,000 / 3) | $666* ($2,000 / 3) |
*Disbursements are made in whole dollars.
The student then withdraws to nine credit hours in the fall term after fall loans have been disbursed. The student is now on track to complete 21 of 24 credit hours and receive 88% of their full annual loan eligibility. The new loan amount is determined, and the prior disbursement is subtracted from the new loan amount. The remaining balance is then divided equally between the remaining terms.
Direct Subsidized Loan
Maximum Subsidized Direct Loan Annual Limit for AY: $4,500
SOR Percentage: 33 / 36 = 92% (.916666 rounded to the nearest whole percentage) =
$4,140
| Metrics | Term | ||
|---|---|---|---|
| Fall | Winter | Spring | |
| Enrolled Credits | 9 | 12 | 12 |
| Disbursement | $1,500 ($4,500 / 3) | $1,320 ($4,140 - 1500 = $2,640 / 2) | $1,320 ($4,140 - 1500 = $2,640 / 2) |
Direct Unsubsidized Loan
Maximum Subsidized Direct Loan Annual Limit for AY: $2,000
SOR Percentage: 33 / 36 = 92% (.916666 rounded to the nearest whole percentage) =
$1,840
| Metrics | Term | ||
|---|---|---|---|
| Fall | Winter | Spring | |
| Enrolled Credits | 9 | 12 | 12 |
| Disbursement | $667 ($2,000 / 3) | $587* ($1,840 - 667 = $1,173 / 2) | $585* ($1,840 - 667 = $1,173 / 2) |
*Disbursements are made in whole dollars.
Enrollment Increase After Disbursement
The student is considered a first-year dependent student eligible for a Direct Subsidized Loan only. The student is enrolled in eight credits for fall, 12 credits for winter, and 12 credits for spring.
Direct Subsidized Loan
Maximum Subsidized Direct Loan Annual Limit for AY: $3,500
SOR Percentage: 32 / 36 = 89% (.888888 rounded to the nearest whole percentage) = $3,115
| Metrics | Term | ||
|---|---|---|---|
| Fall | Winter | Spring | |
| Enrolled Credits | 8 | 12 | 12 |
| Disbursement | $1,039* ($3,115 / 3) | $1,038* ($3,115 / 3) | $1,038* ($3,115 / 3) |
*Disbursements are made in whole dollars.
The student then increases enrollment to 16 credit hours for spring term and is now enrolled for 36 credits for the academic year. SOR has already been applied, and the student may receive the remaining full-time loan amount.
Direct Subsidized Loan
Maximum Subsidized Direct Loan Annual Limit for AY: $3,500
SOR Percentage: 36 / 36 = 100% x $3,500 = $3,500
| Metrics | Term | ||
|---|---|---|---|
| Fall | Winter | Spring | |
| Enrolled Credits | 8 | 12 | 16 |
| Disbursement | $1,039* ($3,115 / 3) | $1,038* ($3,115 / 3) | $1,423 ($3,500 - $2,077 from fall and winter) |
*Disbursements are made in whole dollars.
Periods of Enrollment for Less Than a Full Academic Year
The student is graduating at the end of the fall term; their loan is subject to graduation prorating. The student is a second-year independent who is eligible for an Unsubsidized Loan only in the amount of $10,500. First, the annual loan limit is calculated by the fall term's share of the academic year ($10,500 / 3) and is reduced to $3,500 for full-time enrollment. The Schedule of Reduction (SOR) is applied to the loan amount based on the student's nine-credit enrollment.
Direct Unsubsidized Loan
Amount of Academic Year Loan Limit Term Represents : $3,500 ($10,500 / 3 = $3,500)
SOR Percentage: 9 / 12 = 75%
Disbursement (fall only): $2,625 (75% of $3,500)
Ineligible Term Due to Terminated SAP Status
Students are not eligible for aid during fall term due to a terminated Satisfactory Academic Progress status. Credit hours earned during this period of ineligibility are not included in the SOR calculation. The student successfully completed 15 credits during the fall term and has regained aid eligibility for the winter term. The student is enrolled in nine credits for the winter term and 12 credits for the spring term. The student is a first-year student and has only a Direct Subsidized Loan.
Direct Subsidized Loan
Maximum Subsidized Direct Loan Annual Limit for AY: $3,500
SOR Percentage: 21 / 36 = 58% (.58333333 rounded to the nearest whole percentage)
= $2,030
| Metrics | Term | ||
|---|---|---|---|
| Fall | Winter | Spring | |
| Enrolled Credits | 15 | 9 | 12 |
| Disbursement | $0 (ineligible due to SAP) | $1,015 ($2,030 / 2) | $1,015 ($2,030 / 2) |
Note: The examples provided are for illustrative purposes only and do not cover every possible enrollment scenario. Federal regulations governing student financial aid are subject to change. Additionally, final loan eligibility cannot be fully determined until the end of each term and the completion of the full academic year.
Parent Plus Loan Changes
Effective July 1, 2026, new annual and aggregate limits will apply to parent PLUS Loans:
- Annual Limit: $20,000 per dependent student
- Aggregate Limit: $65,000 per dependent student
For parent PLUS Loan borrowers to continue borrowing parent PLUS Loans under the previous loan limits instead of the new loan limits, a student must remain continuously enrolled in the same program of study at the same institution as they were enrolled as of June 30, 2026, and either:
- The parent borrower must have had a parent PLUS Loan disbursed for that same program before July 1, 2026, or
- The student must have had a Direct Loan (subsidized or unsubsidized) disbursed for that same program before July 1, 2026.
If the above requirements are met, the new parent PLUS Loan limits do not apply while the student is completing their program, for up to the earlier of three academic years or the student鈥檚 time to credential, provided the student remains continuously enrolled.
Parents of current students who do not currently meet these criteria can still qualify for this legacy provision if:
- The parent borrows a parent PLUS Loan, and a disbursement is made before July 1, 2026, or
- The student borrows a Direct Loan (subsidized or unsubsidized), and a disbursement is made before July 1, 2026.
The new limits will apply to any other dependent student in the family who first borrows on or after July 1, 2026.
Federal Pell Grant Eligibility
Students who receive grants or scholarships from non-federal sources (institutional, state, or private) that cover their entire cost of attendance (COA) are ineligible to receive a Pell Grant, even if otherwise eligible for the program.
Students are ineligible for a Pell Grant if their SAI exceeds twice the maximum Pell Grant award. Students with an SAI equal to or greater than 14,790 (twice the maximum Pell Grant) are ineligible to receive a Pell Grant.
Federal Loan Repayment Plans
The OBBBA reduces the number of repayment plan options to a single income-based plan, RAP, and an updated Standard Repayment Plan. These new plans will begin July 1, 2026, for any new loans borrowed after that date. Current borrowers can also choose to switch to one of the new plans. If a current borrower does not take out any new loans after July 1, 2026, and is on the current standard, graduated, or extended repayment plan, they may keep that plan until they pay off their loans. Any borrower on a current income-based repayment (IBR) plan can maintain their current plan or switch between other available plans before July 1, 2028. Any outstanding loans utilizing one of the current IBR plans on July 1, 2028, will be converted to the new Repayment Assistant Plan.
The income-based plan, called the Repayment Assistant Plan or RAP, has varying monthly payments based on the borrower's and their spouse's AGI. The rate will be between 1-10% of AGI, but cannot be reduced lower than $10 per month. RAP is a 30-year repayment period, and payments made under this plan can qualify for Public Service Loan Forgiveness. RAP also eliminates negative amortization so that a borrower's outstanding debt cannot increase even though they make their monthly payments.
The new Standard Repayment Plan is a fixed repayment plan over 10, 15, 20, or 25 years based on the total amount of borrowed loans or outstanding debt when opting into the Standard Repayment Plan. Any new loans borrowed after July 1, 2026 will automatically be put into the Standard Repayment Plan unless they choose another option when entering repayment.
Institutional Accountability
To ensure program value, the Department of Education now monitors "Gainful Employment for All." This metric compares the earnings of college graduates to those of high school graduates in related careers. Programs where graduates consistently earn less than their peers without a degree may lose access to federal student loans.
91重口 expects all our programs to meet these standards. If a program ever becomes at risk of losing loan eligibility, we will notify impacted students immediately.