Federal Student Aid Changes Effective July 1, 2026

What’s changing:

• Annual borrowing limits remain the same for undergraduate students.
• All federal student loans will now count toward a new lifetime federal loan cap of $257,500 (excluding Parent PLUS Loans).
• Institutions are now required to reduce Direct Loans for any student who is enrolled in less than 24 credits across an academic year (two semesters).

• Fall credits + Spring credits/Academic Year credits (24) = Schedule of Reduction
  • 12 fall credits + 12 spring credits/ Academic Year = 100% (no reduction needed)
  • 9 fall credits + 12 spring credits/ Academic Year = 88% (reduce fall by 12%)
• Adjustments must be made at the time of disbursement. If a student is enrolled less than full time prior to disbursement, their loan will remain on hold until the student confirms their enrollment. Financial Aid staff will then adjust the student’s loan 3-5 business days after the student confirms their enrollment.
• Adjustments will also be made if a student drops a course during the semester. For example, A student receives their fall disbursement in August and then drops a course 3 weeks into fall semester. Their fall semester loan will be adjusted after they drop the course. This may result in the student owing back money to Iowa State University.

What’s changing:

• Annual loan limits remain $20,500 per year for most graduate programs.
• Annual loan limits for professional programs (veterinary medicine) increase to $50,000 per year.
• New lifetime limits are established:
  • Graduate programs: $100,000 maximum
  • Professional programs (veterinary medicine): $200,000 maximum
• Additional loan eligibility previously available for certain health professions is eliminated.

What this means for you:

• Graduate borrowing is now capped more clearly, and federal loans may no longer cover the full cost of attendance.
• Careful long‑term borrowing planning is more important than ever.

What’s changing:

• Graduate PLUS Loans are eliminated for new borrowers as of July 1, 2026.
• Graduate students will no longer be able to borrow up to the full cost of attendance through federal loans.
• A legacy provision allows some currently enrolled graduate students to continue using Grad PLUS Loans for their current program of study:
  • Up to three additional academic years, or
  • Until completion of their current program (whichever comes first).

What this means for you:

• Students starting graduate or professional programs in 2026–27 or later will need to rely on:
  • Direct Unsubsidized Loans (within new limits)
  • Scholarships, assistantships, savings, or private loans

What’s changing:

• New borrowing caps apply for new Parent PLUS borrowers:
  • $20,000 per year per dependent student
  • $65,000 lifetime limit per dependent student
• These limits apply regardless of repayment, forgiveness, or discharge.
• Parents who borrowed or whose students borrowed a Direct Loan before July 1, 2026, may qualify for legacy borrowing rules tied to that specific student.

What this means for you:

• Parent PLUS Loans may no longer cover the full cost of attendance.
• Families may need to combine multiple funding sources to pay for college.