OB3 Undergraduate Students

How much can undergraduates borrow under the new law?

Across all colleges and universities, the new law does not change the annual or aggregate loan limits for undergraduate students, although undergraduate loans will now count towards the new lifetime limit. 

• Annual loan limit $5,500-$12,500 based on year in school and dependency status.
• Aggregate loan limit $31,000-$57,500 based on dependency status.
• New lifetime loan limit $257,500 includes student borrowing for undergraduate, graduate, and professional study without regard to any amounts repaid, forgiven, canceled, or otherwise discharged.  

Will parents still be able to borrow Parent PLUS Loans? 

Yes, but starting in the 2026–27 academic year, new limits apply:

• Parents will be capped at $20,000 per year and $65,000 lifetime in PLUS borrowing per student.

If you already have Parent PLUS Loans, you are eligible to borrow under the previous loan limits for the remainder of your student’s program or three years, whichever is shorter. Your student must remain continuously enrolled in their current program. If they take a leave of absence or don’t complete a term, you will be considered a new borrower and subject to the new limits.

Are there changes to the Pell Grant program?

Yes. Starting in the 2026–27 academic year, students will no longer be eligible for a Pell Grant if their Student Aid Index (SAI) is greater than twice the maximum Pell award for that year. Pell award amounts will continue to vary based on income and family size, but there is now a firm cutoff tied to the annual Pell maximum. Guidance from the U.S. Department of Education detailing these changes can be found on (APP-25-23) 2026–27 FAFSA Form and Pell Grant Eligibility Updates.

Will these changes affect my Work-Study?

No. The new law does not change how students qualify for Federal Work-Study. At this time, Work-Study eligibility will continue to be based on financial need as determined by the FAFSA and institutional packaging policies. Schools will still decide how much Work-Study funding is available and which students are offered it.

If my parent is subject to the new borrowing limits and is unable to borrow a PLUS Loan because they have reached the aggregate borrowing limit, am I eligible to borrow additional unsubsidized loan funds?

No. For an undergraduate student to borrow additional unsubsidized loan funds, exceptional circumstances (such as an adverse credit history) must prevent their parent from borrowing a PLUS Loan. Reaching the aggregate borrowing limit is not an exceptional circumstance.