Federal Student Loan Changes for the 26/27 Academic Year
(updated 6/26/26)
Federal statute Public Law 119-21, known as the One Big Beautiful Bill Act (OBBBA), enacted in July 2025, includes significant changes to federal student loan programs. These changes go into effect July 1, 2026, and will impact students borrowing federal loans for the 2026–27 academic year and beyond.
This page is intended to help Berklee students and families understand the upcoming changes and how they may affect educational financing decisions.
Important: The information below is provided by Berklee's Office of Student Financial Services based on our current understanding of the legislation. This information is not official federal guidance and may change as additional regulations and implementation details are released. Students and families should refer to the U.S. Department of Education’s website and StudentAid.gov for official information.
Please use the drop-downs below for more detailed information on the points above.
Graduate PLUS Loans
What Is Changing?
The Federal Grad PLUS Loan program will be eliminated for new borrowers starting on July 1, 2026. This means that after July 1, 2026, even if a new student applied for the Grad PLUS loan, the student will be ineligible. The Grad PLUS loan application is not able to distinguish whether or not a student is a new borrower. Being able to apply for a GradPLUS does not ensure eligibility.
Exception Provision
Existing Grad PLUS borrowers may still be able to borrow Grad PLUS up to Cost of Attendance. Students who meet certain criteria are eligible for an exception to the new limit.
What This Means for Students
Graduate students planning to enroll after July 1, 2026, need to consider how they will finance educational expenses. Additional funding may need to come from personal resources, employer assistance, outside scholarships, or private educational loans.
Graduate Federal Direct Unsubsidized Loans
What Is Changing?
Graduate students will continue to have access to Federal Direct Unsubsidized Loans at existing annual limits, but lifetime borrowing limits will change.
Under the new law:
Annual borrowing limit: $20,500 for full-time enrollment (unchanged)
New aggregate borrowing limit: $100,000 (excludes any Undergraduate loans)
New lifetime borrowing limit (including any Undergraduate or Graduate PLUS loans): $257,500
Exception Provision
If you meet certain requirements, you may be able to continue to borrow under previous loan limits. This is called the “interim exception.”
Graduate students also have new lifetime aggregate limits, which includes any Grad PLUS borrowed to date.
What This Means for Students
Graduate students who rely heavily on federal borrowing should carefully review their financing plans, particularly if they anticipate borrowing throughout a multi-year degree program. Students who are less than full-time will have their loans prorated as well. Students who have exceeded the published time to complete a degree may also be out of federal loan eligibility.
Parent PLUS Loans
What Is Changing?
Beginning July 1, 2026, new Parent PLUS loan borrowers will be subject to the following borrowing limits:
Maximum annual borrowing: $20,000 per dependent student
Maximum lifetime borrowing: $65,000 per dependent student
Exception Provision
The exception applies to students whose parents have previously borrowed a parent loan prior to the 26-27 academic year. Those parents are exempt from the new limits as long as they meet certain qualifications.
What This Means for Families
New borrowers, and existing borrowers who do not qualify for the exception, will need to explore additional financing strategies beginning with the Fall 2026 semester, including personal resources, employer assistance, outside scholarships, and/or private educational loans.
Students Enrolled Less Than Full-Time
What Is Changing?
The legislation includes a provision that will align federal student loans (unsubsidized and subsidized) to the student’s enrollment level for students enrolled less than full-time at any time during the semester. The provision applies to both graduate and undergraduate students.
This means students will have their loans reduced in direct proportion to the equivalent percentage of full-time enrollment.
How it Works
Students enrolled full-time will remain eligible for 100% of their annual federal loan limit. Under the new federal rules, students enrolled less than full-time will receive a prorated loan amount based on their enrollment level. This means that students taking fewer credits would be eligible for a reduced loan amount compared to a full-time student. Students must be enrolled for at least half time to receive a loan.
In addition, loan eligibility will be recalculated if a student changes their enrollment after the semester begins. For example, dropping or withdrawing from a course would result in a proportional reduction to the student's loan eligibility. If the change happens after the add/drop period ends and the student has already received loan funding, a portion of the loan will need to be removed, which would create a balance owed to Berklee.
If a student's loan eligibility changes due to enrollment adjustments, they will receive an updated award letter reflecting the revised loan amount.
What This Means for Students
Students considering part-time enrollment should carefully plan to finance their semester with other options as their federal loan eligibility will be lower than under current rules, and should be particularly cautious when withdrawing from classes during the semester.
Questions?
Berklee's Office of Student Financial Services will continue monitoring federal guidance and will update this page as additional information becomes available.
Students and families with questions about how these changes may affect their financial aid options are encouraged to contact One Stop Student Services at onestop@berklee.edu for assistance.
