Changes to Federal Student Aid: What Borrowers Need to Know for 2026-27

Dear students,

Every year, there are some changes in federal regulations that may impact students who receive federal student aid. This year is particularly consequential. As you may have heard,  the One Big Beautiful Bill Act, which was passed on July 4, 2025, is bringing many changes to federal student aid programs.

Most of these changes came into effect on July 1, 2026 and will affect students for the 2026-27 school year.

Below we will explore two of the most important changes: the prorating of loan limits, and the streamlining of loan repayment plans.

Loan Schedule of Reduction

As of July 1, 2026, the loan limits for eligible students (the maximum amount you can borrow) will be prorated depending on your enrollment level, similar to grant funding.

When you register for a program, you are asked to choose an enrollment level for each semester. For example, you may choose a full-time schedule (12 credits/semester) or a part-time schedule (between 6 credits and 12 credits).

Before the changes, federal student loans would be disbursed in full for students, regardless of whether they were enrolled full-time or part-time.

Beginning on July 1, 2026, however, all student loan borrowers who are enrolled less than full time (less than 12 credits/semester) will only be able to borrow loan amounts in direct proportion to their credit load. (The minimum schedule to be eligible for Federal student loans will remain 6 credits/semester).

With these new regulations, students must be enrolled full time (12 credits/semester) to receive their full loan offer. If the student’s schedule is reduced, the loans will be reduced for every credit below full time until a student is less than half time, at which point the entire loan will be removed.

This process is referred to as a “Schedule of Reduction” and will be ongoing throughout the semester. If a student drops classes at any point during the semester, the Financial Aid Office may have to reduce previously disbursed loans to match the new level of enrollment or after loan disbursements drop classes may affect the next semester loans.

Changes to Federal Loan Repayment Plans

In addition to the changes on loan borrowing amounts mentioned above, federal loan repayment options are being consolidated into a simplified system to streamline choices for borrowers.

Beginning on July 1, 2026, the new Repayment Assistance Plan (RAP) will serve as the primary income-driven repayment option, replacing former plans such as the Saving on a Valuable Education (SAVE) Plan. Like previous income-driven options, RAP caps a borrower’s monthly payment based on a percentage of their adjusted gross income.

A key feature of RAP is the unpaid interest waiver. If a borrower’s required monthly payment does not cover the interest that accumulates that month, the remaining interest will be waived, provided the payment is made on time. This measure prevents a borrower’s total balance from increasing over time while making lower payments, emphasizing the critical importance of maintaining a consistent, on-time payment history.

Borrowers who are currently enrolled in the SAVE plan will be required to log in to their loan servicer account to select the new Repayment Assistance Plan (RAP) or alternative repayment option.

Assistance and Next Steps

If you have any questions, all students (current and former) as well as prospective students are encouraged to contact our Financial Aid Office with any questions or to schedule an individual financial aid appointment. You can find additional Financial Aid information from Sessions College here.

For comprehensive information regarding loan proration and federal repayment updates, please review the official One Big Beautiful Bill Act Updates | Federal Student Aid resource page.