Federal financial aid changes effective July 1, 2026
Updated 4.22.2026
On July 4, 2025, the One Big Beautiful Bill Act (OB3) was signed into law, creating several changes to federal financial aid options, eligibility, and repayment. These changes will impact new and currently enrolled students utilizing federal financial aid. There are no changes to aid eligibility for the 2025–26 year. These changes will affect the 2026–27 academic year and beyond. Students enrolled before Fall 2026 may be eligible for legacy provisions on some of these changes. The information on this page and studentaid.gov will be updated as more details become available.
Explore the impact to:
Undergraduate student changes
Parent PLUS Loan
- Parents may borrow up to $20,000 per year per dependent student. Previously, parent borrowers could borrow up to the full cost of attendance minus other aid.
- The Parent PLUS Loan will have a $65,000 lifetime (aggregate) debt limit per dependent student (without regard to amounts forgiven, repaid, canceled, or discharged).
- Any Parent PLUS Loans already borrowed count toward these limits.
- Limits are per dependent student; multiple parents cannot borrow for a student above this limit.
Legacy provision
- If a student is eligible for the legacy provision, parents can continue to borrow under previous loan limits for three academic years or the remainder of their dependent student’s expected time to credential, whichever is less.
- Expected time to credential and remaining time to credential are calculated under the assumption of continuous full-time enrollment. Students who exceed the expected time to credential — four academic years for a B.F.A., B.A., or B.Des. — will lose legacy status and be subject to the new loan limits.
- Students may qualify for and maintain legacy status if they:
- Have had a federal loan disbursement prior to July 1, 2026.
- Maintain continuous enrollment, with no breaks other than summer quarters.
- Complete their degree within the expected time frame.
- Important note: Withdrawing entirely from a quarter or taking any gap in enrollment during the regular academic year will trigger a loss of legacy status.
- Parent borrowers and students must still meet all other application, credit, and eligibility requirements to receive a PLUS Loan.
What does this mean for students?
- New student parents who borrow the $20,000 per year maximum during their first three years will only have $5,000 of eligibility remaining in the fourth year. Parent borrowers may want to plan their borrowing around the aggregate debt limit, rather than the annual limit, to help funds last for a full four years.
- Currently enrolled students will have reduced eligibility for Parent PLUS if they do not meet the requirements for the legacy provision.
- A total withdrawal or gap in enrollment will result in a parent’s PLUS Loan being subject to the new rules when the student returns.
Loan proration based on enrollment
- Undergraduate loan eligibility is determined by the number of courses a student is enrolled in and completes during the term. Loan eligibility will be prorated if a student is enrolled less than full time.
- Undergraduate students must still enroll in at least two courses that apply toward their degree program to remain eligible for federal student loans.
- Any course a student does not complete, including courses from which a student withdraws or unofficially withdraws by failing due to absences, will result in a reduction of federal loan eligibility.
- Proration applies to Direct Subsidized and Direct Unsubsidized Loans. Proration does not apply to Parent PLUS Loans.
- There are no legacy provisions for loan proration; this policy will apply to all borrowers beginning with the 2026–27 academic year.
What does this mean for students?
- Under previous rules, students could receive federal loans at the same level for half-time and full-time enrollment. Under the new rules, students who are enrolled less than full-time will see reduced loan eligibility.
- Students who withdraw from courses will have loan disbursements reduced, which may create a balance due on their student account.
Graduate student changes
Graduate PLUS Loan
- The Graduate PLUS Loan will be unavailable to new borrowers after June 30, 2026.
Legacy provision
- If a graduate student is eligible for the legacy provision, they can continue to borrow under previous loan limits for three academic years or the remainder of their expected time to credential, whichever is less.
- Expected time to credential and remaining time to credential are calculated under the assumption of continuous full-time enrollment. Students who exceed the expected time to credential — 1.5 academic years for an M.A. or three years for an M.F.A., M.Arch., or M.B.I. — will lose legacy status and be subject to the new loan limits.
- Students may qualify for and maintain legacy status if they:
- Have had a federal loan disbursement prior to July 1, 2026. This includes Unsubsidized Direct Loans and/or Graduate PLUS Loans.
- Maintain continuous enrollment, with no breaks other than summer quarters.
- Continue pursuing the same degree program for which they were most recently enrolled prior to July 1, 2026.
- Complete their degree within the expected time frame, taking only degree-applicable coursework.
- Important note: Withdrawing entirely from a quarter or taking any gap in enrollment during the regular academic year will trigger a loss of legacy status.
- Borrowers must still meet all other application, credit, and eligibility requirements to receive a PLUS Loan.
What does this mean for students?
- New students will be unable to borrow a Graduate PLUS Loan.
- Currently enrolled students will only be eligible for a Graduate PLUS Loan if they meet the requirements for the legacy provisions.
- Current students who are receiving a Graduate PLUS Loan will become ineligible if they change programs, totally withdraw from a quarter, or take a gap in enrollment.
Loan proration based on enrollment
- Graduate loan eligibility is determined by the number of courses a student is enrolled in and completes during the term. Loan eligibility will be prorated if a student is enrolled less than full time, defined as 10 credit hours per quarter for graduate students.
- Graduate students must still enroll in at least one course that applies toward their degree program to remain eligible for federal student loans.
- Any course a student does not complete, including courses from which a student withdraws or unofficially withdraws by failing due to absences, will result in a reduction of federal loan eligibility.
- Proration applies to Direct Unsubsidized Loans and Graduate PLUS Loans.
- There are no legacy provisions for loan proration; this policy will apply to all borrowers beginning with the 2026–27 academic year.
What does this mean for students?
- Under previous rules, students could receive federal loans at the same level for half-time and full-time enrollment. Under the new rules, students who are enrolled less than full-time will see reduced loan eligibility.
- Students who withdraw from courses will have loan disbursements reduced, which may create a balance due on their student account.
SCAD contact information
New students
Contact admission at [email protected] or 800.869.7223 (Savannah, SCADnow) or 877.722.3285 (Atlanta)
Current students (undergraduate and graduate)
Contact student success and advising at [email protected] or 912.525.5820 with questions about:
- Financial aid
- Enrollment and registration
Contact student accounts at [email protected] or 912.525.6104 with questions about:
- Billing
- Payment options
- Payment plan
- Refunds
- Late fees and penalties