Federal Student Aid Changes

What current and future students and families need to know about federal aid changes.

Timeline • Legacy Provisions • FAQs • Glossary

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As of May 1, 2026, The U.S. Department of Education has released final guidance regarding federal student aid changes associated with the One Big Beautiful Bill Act(OBBBA) and related federal aid updates taking effect beginning Summer 2026. The final guidance confirms the changes to Parent PLUS and Graduate PLUS loan rules, legacy borrowing, loan limits, and more. 

PLEASE NOTE: Nazareth University's Office of Financial Aid is currently reviewing the final regulations and working through the required system integration, implementation, and compliance updates necessary to ensure aid is processed accurately. As a result, some financial aid award offers and revisions may be delayed while this review is completed. We appreciate your patience and understanding as our office works to implement these changes responsibly and provide students and families with the most accurate information possible.

This webpage will continue to be updated as additional guidance and operational details become available. 

What's Changing

Beginning Summer 2026

Federal student aid regulations established under the OBBB Act will impact students entering college beginning Summer 2026 term or after, or changing academic programs after Summer 2026.

Graduate & Professional Student Loan Changes

Students entering graduate or professional programs beginning Summer 2026 will no longer have access to the Federal Direct Graduate PLUS Loan program as new borrowers.

Graduate students may still be eligible for:

Important Note About Aggregate Limits

Federal loan limits include both annual and lifetime borrowing caps. Students who previously borrowed federal loans as undergraduate students should review their remaining eligibility carefully. Students approaching aggregate loan limits may need to explore:

Parent PLUS Loan Changes:

Beginning Summer 2026:

  • Federal Direct Parent PLUS Loan will have new borrowing limits:
    • $20,000 per student per academic year 
    • $65,000 lifetime aggregate limit per dependent student
Who and What is affected?

The impact of these changes depends on when you begin your program and whether you borrowed federal loans before Summer 2026. These changes may have the greatest impact on:

  • Graduate and professional student borrowing options
  • Part-time students: Loan limits may be reduced for part-time enrollment
  • Students planning to rely heavily on federal borrowing
  • Families utilizing Parent PLUS Loans: Parent borrowing limits
  • Students nearing federal aggregate loan limits
Planning Ahead

Nazareth University encourages students and families to:

  • File the FAFSA annually as early as possible
  • Monitor cumulative federal borrowing
  • Review program costs and borrowing needs carefully
  • Meet with Financial Aid Counselors to discuss long-term funding strategies

Legacy Provisions

What does "Legacy Status" mean? A legacy provision allows certain students or parents to continue borrowing under current loan rules, even after new rules take effect.

Legacy Eligibility
Parent PLUS Loan Borrowers

A parent may qualify for the legacy provision if all are true:

  • The student was enrolled in a program of study before Summer 2026.
  • A federal student loan was disbursed for that program of study before Summer 2026.

If eligible, a parent may continue borrowing for:

  • Up to three academic years, or
  • The remainder of the students current program; whichever is less.

Important:

  • If the student ceases enrollment or withdraws from the university, the legacy status no longer applies, and the new rules take effect immediately.
  • Legacy status is student-specific. It does not apply to other dependent students unless they were also enrolled in a program of study and a loan was received on their behalf as of June 30, 2026.

Legacy Eligibility
Graduate PLUS Loan Borrowers

A graduate level student may qualify for the legacy provision if all are true:

  • They were enrolled in the same credentialed program before Summer 2026.
  • They had a federal student loan was disbursed for that program before Summer 2026.

Legacy borrowing is allowed for:

  • Three academic years; or
  • the remainder of their current program; whichever is less. 

Changing programs or institutions ends legacy eligibility.

Legacy Eligibility
Program of Study Changes

Undergraduate Programs
  • Legacy status follows degree level
  • If a student enrolled in a bachelor's program at Nazareth University before Summer 2026, legacy status may be maintained, even if you change majors.
  • Transferring institutions ends legacy status. The same is true for a student transferring in from a school where they had legacy provisions.
Graduate Programs
  • Legacy status is tied to the specific academic program (see example)
  • Changing programs, even within the same university, ends eligibility
  • Transferring institutions ends eligibility 
Example

A student enrolled in an MSW program at Nazareth University before Summer 2026 and had a federal Direct Loan disbursed prior to Summer 2026, may maintain legacy status if they remain in the MSW program.

However, if that student later changes their program to an M.S. in Human Resource Leadership, or the student transfers from Nazareth University to another university's MSW program, they will not maintain legacy status.

Pell Grant Eligibility Changes 

The following Pell changes take effect beginning Summer 2026:

  • Students meeting or exceeding their full Cost of Attendance with scholarship/waiver aid will not be eligible for any amount of Pell Grant. 
    • This is a change from previous regulations, which allowed students in some circumstances to be fully funded with scholarship aid and still receive their Federal Pell Grant on top.
  • Students whose Student Aid Index (SAI) is at least two times the current Pell Grant maximum of $7,395 will not be eligible for the Pell Grant. Example: For 2025-26, that would equal an SAI of $14,790.

Schedule of Reductions (SOR)

Beginning Summer 2026, loan limits will be adjusted depending on enrollment level, similar to grant funding. This means new borrowers enrolled less than full time will only be able to borrow loan amounts in direct proportion to their credit load, with a minimum half-time enrollment requirement.

This means:

  • Students enrolled part-time may qualify for reduced annual federal loan amounts
  • Students must still meet minimum half-time enrollment requirements for federal loan eligibility

 

FAQs

Will my financial aid change for Fall 2025 or Spring 2026?

No. There are no changes to federal student loans for Fall 2025 or Spring 2026 terms.

How did OBBB Act Affect the FAFSA Form?

Financial assets that are counted when students and parents complete the 2026-27 FAFSA form will now better reflect a family's need.

What is changing in 2026?

Beginning Summer 2026:

  • Graduate PLUS Loans will no longer be available for new graduate or professional students
  • Parent PLUS Loans will have new borrowing limits:
    • $20,000 per student per year
    • $65,000 lifetime limit per dependent student
What if my parent already borrowed a Parent PLUS Loan?

Your parent may qualify for legacy (grandfathered) borrowing if:

  • You were enrolled before July 1, 2026, and
  • a federal loan was disbursed before that date

If eligible, your parent may continue borrowing for:

  • Up to three academic years. or
  • The remainder of your current program (whichever is shorter)
What does "legacy" or "grandfathered" status mean?

Legacy status allows certain students or parents to continue borrowing federal loans under current rules, even after new limits take effect. For a certain period of time. Explore different student and parent scenarios.

Will I keep legacy status if I change my major?

Undergraduate students: Yes, as long as you remain in the same degree program

Graduate students: No, legacy status is tied to the specific graduate program

What if I transfer to another school?

Legacy eligibility does not transfer to another institution. New loan limits apply at your new school. 

What happens if I withdraw or stop enrollment?

Legacy status ends immediately if a student withdraws or stops enrollment.

Does this affect part-time students?

Federal loan eligibility for student enrolled less than full time will be adjusted based on enrollment level through a process called Schedule of Reductions..

What if I'm starting University or a new program in Summer or Fall 2026?

If you begin with Summer 2026 term or after:

  • Graduate PLUS Loans will not be available
  • Parent PLUS Loans will be subject to new annual and lifetime limits
Who can I contact if I'm not sure how this applies to me?

Contact the Financial Aid Office. We can review your situation and help you understand how these changes may affect you.

Glossary

Aggregate: The maximum amount of a loan that can be borrowed during a specific academic career or period of time.

Legacy: A legacy provision in federal student aid refers to rules that allow students or parents with specific eligibility to continue receiving aid or borrowing federal loans under older criteria, even is the criteria has since changed.

Subsidized Loan: A type of loan where the government pays the interest on the loan while the borrower is in school at least half-time, during a grace period, and during periods of deferment.

Unsubsidized Loan: A type of loan where the interest is accruing during the period of enrollment, during the grace period, and during deferment. 

Parent PLUS Loan: A federal loan that the parent(s) of a dependent undergraduate student can borrow to help pay for their child's education. It is a credit-based loan, not based on the student's or family's financial need. Parents can borrow up to the cost of attendance, minus any other aid the student is receiving. 

Dependent Student: A dependent student is someone whose parent(s) information required on the FAFSA based on the dependency status questions asked on the FAFSA.

Questions?

If you have questions about how these changes may affect your financial aid, please contact the Financial Aid Office. We are here to help.