Changes to Federal Student Aid for 2026-2027
Legislation recently passed by Congress, known as the One Big Beautiful Bill (OB3) Act, will result in significant modifications to the Federal Direct Loan program beginning with the 2026–2027 academic year (effective July 1, 2026).
These changes primarily affect graduate/professional students and parents of undergraduate students. If you are planning to utilize federal loans to finance your education in 2026–27 or later, we encourage you to review these updates carefully to understand how they may impact your financing plan.
Jump to: Definitions | Federal Student Loan Changes | Federal Parent PLUS Loan Changes| Federal Graduate PLUS Loan Changes | Federal Pell Grant Changes
Definitions
- New Loan Borrowers
- Student with no loans taken out for their current degree program prior to July 1, 2026
- Parent who has not taken out loans on behalf of their dependent student prior to July 1, 2026 for the student’s current degree program
- Current Loan Borrowers
- Student who has taken out loans prior to July 1, 2026 for their current degree program
- Parent who has taken out loans on behalf of their dependent student prior to July 1, 2026 for the student’s current degree program
If you are unsure if you or your parent is a new or current loan borrower, please contact the Financial Aid Office at finaid@msoe.edu or (414) 277-7223.
Federal Student Loan Changes
Loan Proration
Students who are enrolled less than full time will only be able to borrow a prorated amount of federal student loans for that semester. The loan amount that can be borrowed will be based on their credit load. Please note that students are still required to be enrolled at least half time to borrow federal student loans.
New Aggregate Loan Limits for Graduate Students
The chart below outlines the new aggregate loan limits for graduate students. Please note that your aggregate loan limit depends on if you have borrowed loans for your current graduate degree program prior to July 1, 2026.
| Graduate students who have not borrowed loans prior to July 1, 2026 for their current graduate degree program. |
$100,000 |
|
Graduate students who have borrowed loans prior to July 1, 2026 for their current graduate degree program** **This provision lasts for three years or until a student completes their current graduate program, whichever comes first. Changing programs or beginning a new degree program after July 1st, 2026 disqualifies a student from this provision. |
$138,500 – no more than $65,500* of this may be in subsidized loan. The graduate aggregate limit includes all federal loans received for undergraduate study. |
Federal Parent PLUS Loan Changes
Beginning July 1, 2026, the Federal Direct Parent PLUS Loan will have annual and aggregate loan limits. Please note that your annual and aggregate loan limits depend on if you have received a Parent PLUS Loan for your current undergraduate degree program prior to July 1, 2026.
The following chart shows the annual limits for the Federal Direct Parent PLUS Loan:
|
|
Annual Loan Limit |
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Students who have received a parent plus loan prior to July 1, 2026 for their current undergraduate program* *This provision lasts for three years or until a student completes their current undergraduate program, whichever comes first. Changing programs or beginning a new degree program after July 1, 2026 disqualifies a student from this provision. |
Up to the cost of attendance minus any other financial aid received |
| Students who have not received a parent plus loan prior to July 1, 2026 for their current undergraduate program* | $20,000 per dependent student |
The following chart shows the aggregate limits for the Federal Direct Parent PLUS Loan:
| Aggregate Loan Limit | |
|
Students who have received a parent plus loan prior to July 1, 2026 for their current undergraduate program* *This provision lasts for three years or until a student completes their current undergraduate program, whichever comes first. Changing programs or beginning a new degree program after July 1, 2026, disqualifies a student from this provision. |
No Aggregate Loan limit |
| Students who have not received a parent plus loan prior to July 1, 2026, for their current undergraduate program* | $65,000 per dependent student |
If you are unsure if you have received a Parent PLUS Loan prior to July 1, 2026, for your current undergraduate degree, please reach out to the Financial Aid Office at finaid@msoe.edu or (414) 277-7223.
Federal Graduate PLUS Loan Changes
Effective July 1, 2026, the Federal Direct Graduate PLUS Loan will no longer be available to new loan borrowers.
Students who have borrowed a federal loan for their current graduate program may continue to borrow Federal Direct Graduate PLUS Loans for up to 3 academic years or until they complete their current graduate program, whichever comes first. Please note that changing programs or starting a new degree program after July 1, 2026 will impact your ability to borrow Federal Direct Graduate PLUS Loans.
If you are unsure if you have received a federal loan for your current graduate program prior to July 1, 2026, please reach out to the Financial Aid Office at finaid@msoe.edu or (414) 277-7223.
Federal Pell Grant Changes
Please note that effective July 1, 2026, students who are receiving non-federal grants and scholarships that meet or exceed their full cost of attendance will not be eligible for the Federal Pell Grant.