Changes starting in the 26-27 school year
The Department of Education has implemented new changes to federal student aid that were signed into federal law via the One Big Beautiful Bill (OB3/H.R. 1) for the 26-27 school year. These changes may impact your current and future financial aid eligibility. Below is a list of the changes so you are aware when planning your academic goals.
Student Borrowing
Before July 1, 2026, students could borrow federal loans for as long as they were enrolled. After July 1, 2026, loan eligibility is based on how long your program is supposed to take. A two-year program gets roughly two years of borrowing - even if the student takes longer to finish.
This matters most for part-time students. Taking 9 units per term instead of 15 can stretch a two-year program into four years. The loans run out after two years either way.
Plus, new borrowers enrolled less than full time (fewer than 12 units) can only borrow in proportion to their unit load, similar to how Pell Grants already work.
Protection for Existing Borrowers
Students who were enrolled and borrowing before July 1, 2026, keep their old loan limits for up to three years, or until they finish their program, whichever comes first. This is called the legacy provision. They lose this protection if they withdraw, transfer to a different program, or stay enrolled past their program's expected length.
Parent Borrowing
Parents can now borrow a maximum of $20,000 per year and $65,000 total per child, across all years. Previously there was no cap. Families planning to transfer to a four-year school need to factor this into their long-term plan.
Please note that students who are not California residents get charged differently. If you planned to use the option of taking out a Parent PLUS loan to cover those additional costs, be aware there are now annual loan limits. You can no longer borrow up to the cost of attendace.
