IN THIS SECTION
Signed into law on July 4, 2025, the “One Big Beautiful Bill Act” makes major updates to federal student aid. Many changes begin July 1, 2026. The Financial Aid Office will continue updating this page as new details are released.
Please note:
- Northwood University does not have the ability to grant exceptions to federal regulations, including those concerning enrollment, legacy provisions or federal loan eligibility.
- This information is based on the current understanding of new rules and regulations as they relate to federal student financial aid, and could change with little notice. Final rulings are not competed until July 1, 2026. We will update and add to this page as additional guidance is received from the U.S. Department of Education.
Key Updates
- New federal loan limits and repayment options go into effect July 1, 2026
- Legacy provisions will protect many currently enrolled borrowers from changes
For current borrowers
If you meet both criteria below, legacy provisions will apply:
- You began enrollment in a degree-seeking program prior to June 30, 2026 and
- You have borrowed federal loans under your current degree-seeking program
You’ll retain access to pre-reconciliation loan limits and borrowing programs for the expected time to degree completion or three academic years—whichever is shorter.
Legacy provisions (Grandfathered Students)
For current borrowers who take out loans before July 1, 2026:
- Annual Federal Direct Subsidized and Unsubsidized Loan limits remain unchanged.
- Federal Parent PLUS borrowers remain eligible to borrow through their student’s current program of study until degree completion.
- Current Federal Parent PLUS borrowers are not subject to the new annual or lifetime borrowing limits.
- Current graduate borrowers are eligible to still utilize the Federal Grad PLUS Loan (must have borrowed prior to the start of the 2026-27 academic year – see below for terms)
Federal Student Aid Loan Changes
Loan Proration for Less Than Full-Time Enrollment – all students
Federal student loans will be prorated based on enrollment level:
- Students enrolled less than full time (12 credits/semester for Undergraduate; 6 credits/semester for Graduate) will receive a reduced prorated loan amount.
- Loan eligibility will be adjusted in proportion to their enrollment status for the semester/year.
Federal PLUS Loan Limits – dependent Undergraduate student
Starting with the 2026–27 academic year, Federal PLUS Loans for undergraduate students will be subject to new borrowing limits (this is per dependent student):
- $20,000 maximum per academic year
- $65,000 lifetime (aggregate) limit
Once the aggregate limit is reached, students and families will no longer be eligible to borrow additional PLUS Loan funds.
Elimination of the Graduate PLUS loan program – Graduate Student
- This loan program previously allowed graduate students the ability to borrow up to their full cost of attendance for both direct and indirect expenses.
- There is a provision that will allow continued participation in the Federal Graduate PLUS loan program if a student is considered Legacy.
New Federal loan limits (Effective July 1, 2026)
- Eligible graduate students can borrow up to $20,500 annually.
- Eligible graduate students (non-grandfathered students) have a lifetime aggregate limit of $100,000. These lifetime amounts do not include any subsidized and unsubsidized loans borrowed at the undergraduate level.
- All new federal student loan borrowers will have a lifetime borrowing maximum on all federal student loans of $257,500 (this includes undergraduate loans as well as graduate loans).
- Loan proration: Annual limits will be prorated for students enrolled less than full-time.
FAQs
Undergraduate students:
Yes. Under current federal rules and regulations, eligible undergraduate students with demonstrated financial need can still qualify for a subsidized loan for the current aid year and beyond.
Yes. Under current federal rules and regulations, undergraduate students can still qualify for an unsubsidized loan for the current aid year and beyond.
Beginning with the 2026-2027 school year, students enrolled less than full-time may have their loans adjusted accordingly. Students enrolled less than half time are not eligible for federal student loan disbursement. It is strongly recommended that you maintain contact with the financial aid office if you plan to drop below full time (12 credits per semester to discuss how it will affect your loans) –
- Lifetime Loan limits for Dependent Students:
- $23,000 Subsidized if qualified
- $31,000 Total between Subsidized and Unsubsidized Lifetime Limit
- Lifetime Loan limits for Independent Students:
- $23,000 Subsidized if qualified
- $57,500 Total between Subsidized and Unsubsidized Lifetime Limit
At any point in your college career and afterwards you can visit the Student Aid Website (login using your FSA ID and password). This website will help you with the following by clicking on Financial Aid Review:
- View all federal loans you have taken out to date (this does not include any private loans you may have taken).
- View your servicer that is handling repayment of your loans along with their contact information.
- View an up-to-date interest accrual.
Note: If you have obtained private loans, you can find out your lender information by checking your personal credit report.
It’s important to keep track of each loan you receive so that you are aware of how much you’ll need to pay each month and in total for your loans as you progress through college. Don’t wait until you graduate or stop attending school to review your student loan debt. If you do wait, you may find you have borrowed more than you can afford to repay or multiple types of loans that require separate monthly payments.
Parents:
Parent PLUS borrowing will be capped at $20,000 per year and $65,000 total per student lifetime.
However, some borrowers are “grandfathered” under the current rules. If a Parent PLUS loan was first disbursed before July 1, 2026 for a specific student, the parent can continue borrowing without the new caps for up to three additional academic years or until the student finishes their program, whichever happens first.
To remain eligible for this grandfathered status:
- The original Parent PLUS loan must have been disbursed before July 1, 2026.
- The student must stay in the same academic program with no withdrawals or stops (summer excluded).
Parents who begin borrowing on or after July 1, 2026, or whose student starts college in fall 2026 and has no prior Parent PLUS loans, will be subject to the new $20,000 annual and $65,000 lifetime borrowing limits.
Parents and their students may research and apply for private student loans if they require additional funding. Your financial aid package may contain both a Parent PLUS loan and a private loan. Total financial aid can never exceed the overall Cost of Attendance. You can visit https://www.northwood.edu/admissions/financial-aid/student-loans/ for additional information on Private/Alternative Loans.
No. Current guidance says that students who withdraw or take a leave from their program will lose access to the legacy provisions immediately.
There are no extensions to the three-year grandfathering provisions so at the end of that period you will be subject to the new annual and aggregate loan limits.
Graduate and professional students:
- Loan limits for Graduate Students Starting AFTER July 1, 2026
- $100,000 in unsubsidized federal loans at the graduate level (does not include undergraduate loans)
- Loan limits for Graduate Students starting BEFORE July 1, 2026, some students may be considered “grandfathered” under the current rules. These students are limited to a lifetime loan limit of $138,500 for all Undergrad and Graduate Loans (excluding plus loans) To remain eligible for this grandfathered status:
- You must have had a loan at the graduate level disbursed before July 1, 2026.
- The student must stay in the same academic program with no withdrawals or stops.
No, current guidance says that students who withdraw or take a leave from their program will lose access to the legacy provisions immediately.
There are no extensions to the three-year grandfathering provisions so at the end of that period you will be subject to the new annual and aggregate loan limits.
- Plus Loan borrowing for Graduate Students starting BEFORE July 1, 2026, some students may be considered “grandfathered” under the current rules. These students are able to continue to borrow Grad Plus Loans with no lifetime lime (on plus only)
- To remain eligible for this grandfathered status:
- You must have had a loan at the graduate level disbursed before July 1, 2026.
- The student must stay in the same academic program with no withdrawals or stops.
- Students who were not in a graduate program with loans disbursed prior to July 1, 2026 are no longer eligible for Federal Direct Plus Loans.
Students may research and apply for private student loans if they require additional funding. Total financial aid can never exceed the overall Cost of Attendance. You can visit https://www.northwood.edu/admissions/financial-aid/student-loans/ for additional information on Private/Alternative Loans.
Beginning with the 2026-2027 school year, students enrolled less than full-time(6 credits per semester for graduate students) may have their loans adjusted accordingly. Students enrolled less than half time are not eligible for federal student loan disbursement. It is strongly recommended that you maintain contact with the financial aid office if you plan to drop below full time.
At any point in your college career and afterwards you can visit the Student Aid Website (login using your FSA ID and password). This website will help you with the following by clicking on Financial Aid Review:
- View all federal loans you have taken out to date (this does not include any private loans you may have taken).
- View your servicer that is handling repayment of your loans along with their contact information.
- View an up-to-date interest accrual.
Note: If you have obtained private loans, you can find out your lender information by checking your personal credit report.
It’s important to keep track of each loan you receive so that you are aware of how much you’ll need to pay each month and in total for your loans as you progress through college. Don’t wait until you graduate or stop attending school to review your student loan debt. If you do wait, you may find you have borrowed more than you can afford to repay or multiple types of loans that require separate monthly payments.
