The Working Families Tax Cuts Act (Pub. L. 119-21) was signed into law on July 4, 2025. This law significantly changes federal student loan eligibility and repayment. These changes will affect students starting on July 1, 2026. The information and FAQ’s below reflect the most current guidance available and is subject to change as we receive additional information from the US Department of Education.
As of July 1, 2026, first-time Parent PLUS borrowers have new annual and lifetime loan limits.
A temporary exception exists to allow Parent PLUS borrowers to borrow under the previous loan limits which is referred to as the “legacy provision”. Below are the qualifications for the provision:
As of July 1, 2026 graduate students have new annual and aggregate loan limits:
Starting with the 2026-27 academic year, Federal Direct Loans are required to be adjusted for students that are enrolled less than full-time.
Beginning with the 2026-27 Academic year, the amount a student can borrow per semester in federal student loans will depend on the number of credit hours a student is enrolled in each semester. If student is enrolled less than full-time (11 credit hours or less for UG and 5 credit hours or less for GR) a student’s annual federal loan limit will be reduced based on student’s enrollment. This federal requirement is called the Schedule of Reductions (SOR).
The Schedule of Reductions applies to Federal Direct Subsidized Loans, Federal Direct Unsubsidized Loans, and Graduate Unsubsidized Loans for students who remain eligible to borrow them. Parent PLUS Loans are not subject to the Schedule of Reductions.
A students enrollment can affect how much they are eligible to borrow for the academic year and, in some cases, how much loan eligibility remains for a future semester. Understanding this before a student adds or drops courses can help the student make informed decisions about their schedule and how they plan to pay for college.
Your enrollment intensity compares the number of credit hours you are enrolled in with the number of credit hours considered full-time. Beginning with the 2026-27 academic year, your enrollment intensity is used to determine your federal Direct Loan eligibility when you are enrolled less than full-time.
Undergraduate Students:
Graduate Students:
Adding or dropping courses can change your enrollment intensity and could impact your student loan eligibility.
Schedule Changes Impact Before Your Federal Loans Are Disbursed:
Schedule Changes Impact After Your Federal Loans Are Disbursed:
There are two repayment plan options:
Existing income-contingent repayment plans will sunset in 2028.
If you start a new graduate program in Fall 2026 and you did not receive a Federal Direct loan (Unsubsidized) for that program before July 1, 2026, you will be considered a new borrower under the new federal rules.
Graduate students can continue to borrow federal student loans under the federal loan programs originally available to you when you start your program of study up to graduation. The federal student loan limits (annual and aggregate) continue to apply. If you exceed the expected length of your program, you will no longer qualify for the legacy provision.
Parents can continue to borrow Federal Direct PLUS loans originally available when the dependent student started their program of study through its expected length or graduation (whichever occurs first).
By staying enrolled at Northwest Missouri State University in your current program of study, you maintain legacy status. If you choose to change majors during your Undergraduate or Graduate studies, you will no longer qualify for the legacy provision and all new loan limits will apply for parent and student.
No. If they meet the requirements to be under the legacy provisions they cannot opt out.
Starting with the 2026-27 academic year, students enrolled less than full-time will have their loans adjusted. Students enrolled less than half-time are not eligible for federal student loans. For example, an undergraduate student enrolled in nine hours will only be eligible for 9/12 (75%) of the semester loan amount previously awarded in aid years prior to 2026-27.
Dropping a class can change your enrollment intensity and could reduce the amount you are eligible to receive in federal student loans. Contact our office to determine how dropping a class could impact your financial aid.
Beginning with the2026-27 academic year, new Parent PLUS borrowers have an annual borrowing limit of $20,000 and an aggregate limit of $65,000 per dependent student.
