Federal Student Loan Changes for 2026–27
The 2026–27 academic year brings significant changes to federal student loan regulations that may affect how students and families finance a UCSB education. Beginning July 1, 2026, new federal rules establish borrowing limits for Parent PLUS loans and change how federal student loan limits are calculated when students enroll less than full time.
Faculty do not need to be financial aid experts, but awareness of these changes can be helpful when advising students, particularly when conversations involve changes in enrollment or academic plans. Students and families should be referred to the Office of Financial Aid & Scholarships for guidance about their individual circumstances.
New Parent PLUS Loan Limits and Legacy Provision
Beginning July 1, 2026, new annual and aggregate borrowing limits take effect for Parent PLUS loans. These changes may affect the amount parents can borrow toward a student's educational expenses.
A limited legacy provision allows some parents who borrowed under the previous rules to continue using the prior loan limits. To remain eligible for the legacy provision, the student must continue enrollment in the same program of study.
Changing Majors and Legacy Eligibility
Updated federal guidance provides additional flexibility in determining what constitutes the same program of study for purposes of the Parent PLUS legacy provision.
A student may change majors and remain eligible for the legacy provision as long as they remain within the same degree program. For example, a student changing from History (BA) to English (BA), from English (BA) to Engineering (BS), or from undeclared to a declared major would still be considered enrolled in the same bachelor's degree program for purposes of the legacy provision.
Because individual circumstances may vary, students and families with questions about legacy eligibility should consult directly with the Office of Financial Aid & Scholarships.
New Loan Reductions for Less-Than-Full-Time Enrollment
Beginning with the 2026–27 academic year, federal student loan limits must be prorated when a student enrolls less than full time.
The new Schedule of Reductions (SOR) determines a student's annual loan limit based on their enrollment across the academic year. The requirement applies to Subsidized Loans, Unsubsidized Loans, and Grad PLUS Loans.
This means that a student's enrollment decisions during the year may affect the total amount they are eligible to borrow.
How Dropping Units Can Affect Loan Eligibility
Under the new rules, enrolling less than full time during one or more academic terms can reduce a student's annual federal loan eligibility.
For example, a sophomore who would otherwise be eligible for the full $4,500 annual subsidized loan and enrolls in 8 units during fall quarter and 12 units during both winter and spring would have their annual loan limit reduced from $4,500 to approximately $4,005 under the Schedule of Reductions calculation.
As students consider adding or dropping courses or otherwise changing their course load, it is important that they understand that these academic decisions may also have financial aid implications.
How Faculty Can Help
Faculty can play an important role by making students aware that changes to enrollment may affect their financial aid. Faculty are not expected to determine a student's eligibility or advise them on specific borrowing decisions.
When a student is considering a change to their course load, faculty can encourage them to contact the Office of Financial Aid & Scholarships before making the change. Financial Aid staff can help students understand how an enrollment adjustment may affect their financial aid eligibility, federal loan limits, loan disbursements, and overall financial plan.
Students and families with questions about borrowing options, Parent PLUS loans, loan eligibility, the Schedule of Reductions, or how the new federal regulations apply to their individual circumstances should work directly with the Office of Financial Aid & Scholarships for individualized guidance.
For detailed information about the 2026–27 federal student loan changes, please visit the Financial Aid & Scholarships website.