Federal Aid Updates
The Reconciliation Bill of 2025 (Public Law 119‑21), also known as the One Big Beautiful Bill, was signed into law on July 4, 2025. This bill includes several changes to federal aid programs. Most changes will take effect beginning with the 2026–27 school year.
To help you understand what’s coming, we’re sharing what we currently know about how the new rules will affect federal aid programs. Because more details are still being released, this information is tentative and may change. We’ll update this page as we learn more.
Additional updates, FAQs and scenarios from Federal Student Aid with the Department of Education can be found on the Federal Student Aid Website.
Undergraduate Student Loan Changes
| Undergraduate Students - Federal Subsidized/Unsubsidized Direct Loans - Effective July 1, 2026 | ||
|---|---|---|
| What has changed: No change. Annual and aggregate federal subsidized and unsubsidized student loan limits remain the same. | ||
| Year In School | Dependent* Students (except students whose parents are unable to obtain PLUS Loans) | Independent* Students (and dependent undergraduate students whose parents are unable to obtain PLUS Loans) |
| First-Year Undergraduate Annual Loan Limit (0-29 credit hrs completed) | $5,500-No more than $3,500 of this amount may be in subsidized loans. | $9,500-No more than $3,500 of this amount may be in subsidized loans. |
| Second-Year Undergraduate Annual Loan Limit (30-59 credit hrs completed) | $6,500-No more than $4,500 of this amount may be in subsidized loans. | $10,500-No more than $4,500 of this amount may be in subsidized loans. |
| Third Year and Beyond Undergraduate Annual Loan Limit (60+ credit hrs completed) | $7,500 per year-No more than $5,500 of this amount may be in subsidized loans. | $12,500-No more than $5,500 of this amount may be in subsidized loans. |
| Aggregate Loan Limit for Undergraduate Students | $31,000-No more than $23,000 of this amount may be in subsidized loans. | $57,500 for undergraduates-No more than $23,000 of this amount may be in subsidized loans. |
| *Your dependency status is determined by whose information you are required to report on the FAFSA. | ||
| Undergraduate Students - Federal Direct Parent PLUS Loans - Effective July 1, 2026 | ||
|---|---|---|
| What has changed: The annual and aggregate Parent PLUS loan limits. | ||
| Annual Parent PLUS Loan Limit | Aggregate Parent PLUS Loan Limit | |
| Received federal loans at KU for CURRENT program of study PRIOR to July 1, 2026 (known as the "legacy provision")* | Cost of Attendance minus Other Financial Aid | No Aggregate Limit |
| Did NOT receive federal loans at KU for current program prior to July 1, 2026 | $20,000 per year, per student | $65,000 per student |
| *Students who qualify under the legacy provision can continue to have parents borrow under previous Parent PLUS loan limits for 3 academic years or the remainder of their dependent student's expected time to credential, whichever is less. Students cannot opt out of the legacy provision. | ||
Starting with the 2026-2027 school year, students may not receive more than half of the annual limit in any single semester.
Additionally, the annual and semester limits for federal loans assume a student will be enrolled full time throughout the academic year. If a student is not enrolled full time during a semester, their federal loans will be prorated based on how many hours they are enrolled in. Proration will multiply the number of hours a student is enrolled in by the semester limit (50% of annual limit). That product will be divided by the number of hours required for full time status (12 hours for undergraduates, 9 hours for graduate/professional students).
Loan proration applies to subsidized loans, unsubsidized loans, and Graduate PLUS loans. Parent PLUS loans are not subject to proration.
Some students will be granted full-time status regardless of hours (typically GTAs and dissertation students), and loans for these students will not be subject to proration.
Parent PLUS Loan Changes
| Parents - Federal Direct Parent PLUS Loans - Effective July 1, 2026 | ||
|---|---|---|
| What has changed: The annual and aggregate Parent PLUS loan limits. | ||
| Annual Parent PLUS Loan Limit | Aggregate Parent PLUS Loan Limit | |
| Received federal loans at KU for CURRENT program of study PRIOR to July 1, 2026 (known as the "legacy provision")* | Cost of Attendance minus Other Financial Aid | No Aggregate Limit |
| Did NOT receive federal loans at KU for current program prior to July 1, 2026 | $20,000 per year, per student | $65,000 per student |
| *Students who qualify under the legacy provision can continue to have parents borrow under previous Parent PLUS loan limits for 3 academic years or the remainder of their dependent student's expected time to credential, whichever is less. Students cannot opt out of the legacy provision. | ||
Graduate & Professional Student Loan Changes
"Graduate Student" refers to all graduate students enrolled in a master's or doctoral degree program that is not classified as a "professional" degree program for federal loan purposes.
| Graduate Students - Federal Unsubsidized Direct Loans - Effective July 1, 2026 | ||
|---|---|---|
| What has changed: The annual and aggregate federal unsubsidized direct student loan limits for graduate students. | ||
| Annual Loan Limit | Lifetime Loan Limit | |
| Received federal loans at KU for your CURRENT Graduate Program of study PRIOR to July 1, 2026 (known as the "legacy provision")* | $20,500 | $138,500 (includes undergraduate loans) |
| Did NOT receive federal loans at KU for CURRENT Graduate program prior to July 1, 2026 | $20,500 | $100,000 (not including undergraduate loans) |
| Enrolled in a new graduate program at KU after July 1, 2026 | $20,500 | $100,000 (not including undergraduate loans) |
| *Students who qualify under the legacy provision will continue to borrow under previous loan limits for 3 academic years or the remainder of their expected time to credential, whichever is less. Students cannot opt out of the legacy provision. | ||
The federal government uses the term “professional student” to describe students enrolled in specific, advanced degree programs that lead directly to a professional license.
"Professional Student" includes students enrolled in the following doctoral programs: Law; Clinical, Counseling and Applied Psychology (doctoral programs); Medicine; and Pharmacy / Pharmaceutical Sciences.
| Professional Students - Federal Unsubsidized Direct Loans - Effective July 1, 2026 | ||
|---|---|---|
What has changed: The annual and aggregate federal unsubsidized direct student loan limits for professional students. Please note: "Professional Programs" include: Law; Clinical, Counseling and Applied Psychology (doctoral programs); Medicine; and Pharmacy / Pharmaceutical Sciences. | ||
| Annual Loan Limit | Lifetime Loan Limit | |
| Received federal loans at KU for CURRENT Professional Program of study PRIOR to July 1, 2026 (known as the "legacy provision")* | $20,500 | $138,500 (includes undergraduate loans) |
| Did NOT receive federal loans at KU for CURRENT Professional Program prior to July 1, 2026 | $50,000 | $200,000 (not including undergraduate loans) |
| Enrolled in a new professional program at KU after July 1, 2026 | $50,000 | $200,000 (not including undergraduate loans) |
| *Students who qualify under the legacy provision will continue to borrow under previous loan limits for 3 academic years or the remainder of their expected time to credential, whichever is less. Students cannot opt out of the legacy provision. | ||
PLUS loans for Graduate Students and Professional Students are being eliminated for new borrowers. The "Grad PLUS" program - which previously allowed graduate and professional students to borrow up to full cost of attendance - will no longer be available to new borrowers starting July 1, 2026.
| GRADUATE & PROFESSIONAL STUDENTS - Federal Direct PLUS Loans - Effective July 1, 2026 | ||
|---|---|---|
| What has changed: The Direct PLUS Loan program for Graduate and Professional students is being eliminated for new borrowers. | ||
| Annual Graduate PLUS Loan Limit | Aggregate Graduate PLUS Loan Limit | |
| Received federal loans at KU for CURRENT program of study PRIOR to July 1, 2026 (known as the "legacy provision")* | Cost of Attendance minus Other Financial Aid | No Aggregate Limit |
| Did NOT receive federal loans at KU for current program prior to July 1, 2026 | Graduate PLUS loans are not an option | Graduate PLUS loans are not an option |
| *Students who qualify under the legacy provision can continue to borrow under previous Graduate PLUS loan limits for 3 academic years or the remainder of their expected time to credential, whichever is less. Students cannot opt out of the legacy provision. | ||
Starting with the 2026-2027 school year, students may not receive more than half of the annual limit in any single semester.
Additionally, the annual and semester limits for federal loans assume a student will be enrolled full time throughout the academic year. If a student is not enrolled full time during a semester, their federal loans will be prorated based on how many hours they are enrolled in. Proration will multiply the number of hours a student is enrolled in by the semester limit (50% of annual limit). That product will be divided by the number of hours required for full time status (12 hours for undergraduates, 9 hours for graduate/professional students).
Loan proration applies to subsidized loans, unsubsidized loans, and Graduate PLUS loans. Parent PLUS loans are not subject to proration.
Some students will be granted full-time status regardless of hours (typically GTAs and dissertation students), and loans for these students will not be subject to proration.
Pell Grant Changes
Effective July 1, 2026, students whose Cost of Attendance (COA) is fully covered by non-federal aid (non-federal aid can include state, institutional, and external scholarships, grants, etc.) will no longer be eligible for a Federal Pell Grant.
This change ends the previous allowance for Pell Grants to exceed a student's COA when combined with other aid.
Example: A Pell-eligible student with a scholarship covering the full Cost of Attendance will no longer receive both the scholarship and the Pell Grant.
Effective July 1, 2026, students with an SAI greater than twice the maximum amount of a Federal Pell Grant will be ineligible for any Pell Grant.
Example: If the maximum Pell Grant amount is $7,395, students with an SAI over 14,790 will not qualify for a Federal Pell Grant.
FAFSA Changes
Effective July 1, 2026, family farms, family-owned commercial fisheries, and family-owned small businesses will no longer be counted as assets when reporting assets on the FAFSA.
- Family Farm is defined as farms on which the family resides
- Small Business is defined as businesses with 100 or fewer full-time (or full-time equivalent) employees
- Family-owned commercial fisheries are now also exempt from asset reporting
Effective July 1, 2026, foreign income must now be included in the Adjusted Gross Income (AGI) reported for Federal Pell Grant eligibility.
Federal Student Loan Repayment Updates
We encourage any borrower who is currently in repayment of their federal loans to contact their loan servicer and discuss how these changes may impact their situation. There may be other details a current borrower in repayment will want to consider before deciding on how to proceed.
Please review the Federal Student Aid updates and scenarios for more information.
If you have at least one loan first disbursed on or after July 1, 2026, you’ll be required to repay all of your eligible Direct Loans under the Repayment Assistance Plan or the Tiered Standard Plan.
If you have Direct Subsidized Loans, Direct Unsubsidized Loans, Direct PLUS Loans for graduate or professional students, or a Direct Consolidation Loan that doesn’t include a Direct PLUS Loan for parents, you’re permitted to repay those loans under the Repayment Assistance Plan or the Tiered Standard Plan.
If you have parent PLUS loans or a Direct Consolidation Loan that includes a parent PLUS loan, you’re permitted to repay those loans only under the Tiered Standard Plan.
We encourage any borrower who is currently in repayment of their federal loans to contact their loan servicer and discuss how these changes may impact their situation. There may be other details a current borrower in repayment will want to consider before deciding on how to proceed.
Please review the Federal Student Aid updates and scenarios for more information.
If you have at least one loan first disbursed on or after July 1, 2026, you’ll be required to repay all of your eligible Direct Loans under the Repayment Assistance Plan or the Tiered Standard Plan.
If you have Direct Subsidized Loans, Direct Unsubsidized Loans, Direct PLUS Loans for graduate or professional students, or a Direct Consolidation Loan that doesn’t include a Direct PLUS Loan for parents, you’re permitted to repay those loans under the Repayment Assistance Plan or the Tiered Standard Plan.
If you have parent PLUS loans or a Direct Consolidation Loan that includes a parent PLUS loan, you’re permitted to repay those loans only under the Tiered Standard Plan.
We encourage any borrower who is currently in repayment of their federal loans to contact their loan servicer and discuss how these changes may impact their situation. There may be other details a current borrower in repayment will want to consider before deciding on how to proceed.
Please review the Federal Student Aid updates and scenarios for more information.
If all of your loans are first disbursed before July 1, 2026, and you do not plan to borrow additional loans on or after July 1, 2026, then you’ll have access to the following repayment plans, if you’re eligible:
- Standard Repayment Plan
- Graduated Repayment Plan
- Extended Repayment Plan
- Income-Based Repayment (IBR) Plan
- Income-Contingent Repayment (ICR) Plan
- Pay As You Earn (PAYE) Plan
- Repayment Assistance Plan
The only plan that you won’t have access to is the Tiered Standard Plan.
You can switch between any of the plans for which you’re eligible at any time.
The PAYE and ICR Plans will be retired no later than July 1, 2028. Federal Student Aid is working on a transition plan for borrowers who are enrolled in either the PAYE or ICR Plan.
Learn about your repayment plan options if you’re a parent PLUS borrower who doesn’t intend to take out new loans after July 1, 2026.