Federal student aid changes under the One Big Beautiful Bill Act (OBBBA) officially took effect on July 1, 2026, unless a specific rule notes a different timeline. Below you will find the latest details we have on how these policy updates affect students and families. We are closely tracking all government announcements and will post new updates to this page as soon as they become available. 

FEDERAL DIRECT LOAN PROGRAMS

Grad Plus Loan Changes and Alternative Loan Options

Before the passage of the OBBBA, graduate and professional students could use Grad PLUS loans to cover their remaining cost of attendance after accounting for other financial aid. Effective July 1, 2026, Grad PLUS loans are no longer available to new borrowers, students who switch programs, or those who transfer to a different university.

Under a temporary grandfather clause, students who took out a Federal Direct Loan for their current program prior to July 1, 2026, may continue accessing Grad PLUS loans at the same institution. This exception lasts for up to three additional academic years or until degree completion—whichever occurs first—provided the student maintains continuous enrollment. Any student who did not borrow a Direct Loan for their current program before the July 1, 2026 deadline, as well as new, transfer, or program-changing students, must explore alternative funding options to pay for remaining educational costs.

Alternative Loan Options

If you are not eligible for the Grad PLUS Loan Program under the rules imposed by the OBBBA, visit our webpage regarding private loans information. The Cooper Union does not have an exclusive partnership with any single lender and does not endorse or recommend specific loan providers. We suggest using ELM Select as a starting point to compare various loans and lenders.

Understanding Your Loan Limits (Pre-OBBBA Rule)

If you received any Federal Direct Loan before July 1, 2026, you may continue under the previous (pre-OBBBA) loan limits.

How Long Does This Apply? This limited interim exception lasts until whichever comes first:

• Up to three additional academic years, or
• Until you complete your degree program

Eligibility Requirements To remain eligible for these previous loan limits, you must:

1. Maintain Continuous Enrollment: Remain continuously enrolled in the same degree program you were in when you first borrowed.
2. Stay at the Same School: Remain enrolled at the same institution where your original loan was disbursed.
    

Unsubsidized Loan Borrowing Limits for Graduate Students

Graduate students will be subject to new annual and lifetime borrowing caps. These limits do not include amounts borrowed as an undergraduate.

• Effective July 1, 2026 $20,500 annually and $100,000 aggregate

Borrowing Limits for Parent PLUS Loans

Parents are subject to new annual and lifetime borrowing caps per dependent student.

• Effective July 1, 2026 $20,000 annually and $ 65,000 aggregate

Parents and students who took out any Federal Direct Loan prior to July 1, 2026, may continue borrowing under previous pre-OBBBA guidelines for up to three additional academic years or until degree completion, whichever happens first. Under these rules, a parent's maximum borrowing capacity is equal to the total cost of attendance minus any other financial assistance received. To remain eligible for this temporary provision, the student must stay continuously enrolled in the same program and attend the same institution where the original loan was issued.

Federal Loan Program Lifetime Loan Limits

Federal student borrowing is now capped at a lifetime maximum of $257,500, with the exception of Parent PLUS loans. If you received a Federal Direct Loan prior to July 1, 2026, you can continue under the earlier borrowing rules for up to three additional academic years or until you graduate, whichever occurs first. To keep these previous limits, you must remain continuously enrolled in the same degree program at the same college where you first took out your loan. Should you break continuous enrollment or transfer to another school, any loans you borrowed before July 1, 2026, will count toward your new $257,500 lifetime cap.

Federal Loan Reduction for Less-Than-Full-Time Enrollment

Federal loan limits are now adjusted based on a student's total credit load during each term. Students enrolled below full-time status can only borrow an amount directly proportional to the number of credits they are taking, provided they meet the minimum half-time enrollment threshold. These reduction rules apply across Direct Subsidized, Direct Unsubsidized, and Grad PLUS loans.

Important Things to Know

• Your enrollment status is calculated strictly using the exact credit hours you register for each term, completely separate from your tuition expenses or program length.
• You must be enrolled at least half-time to qualify for any federal student loan funding.

Impact of a Leave of Absence (LOA) on Federal Loan Eligibility

An approved LOA that meets Federal Title IV criteria does not count as a withdrawal. As long as a student returns within the maximum federal allowance of 180 days in any 12-month period, they maintain their continuous enrollment status and preserve their pre-OBBBA legacy loan eligibility. However, failing to re-enroll before the approved LOA period expires converts the leave into a formal withdrawal, breaking continuous enrollment and subjecting all future borrowing to the new OBBBA regulations.

Even while you are temporarily inactive during an approved Leave of Absence, you are still considered continuously enrolled under federal rules, meaning your pre-OBBBA legacy loan protections remain intact.

Becoming inactive without securing an official Leave of Absence creates a formal break in enrollment, which forfeits the student's continuous enrollment status and eliminates their pre-OBBBA legacy loan eligibility.

In summary, if a student takes an approved LOA and returns on time, their pre-OBBBA legacy eligibility is preserved. If the LOA is exceeded, the student withdraws, or the student becomes inactive without an approved LOA, this is treated as a break in enrollment, and pre-OBBBA legacy eligibility may be lost.

Pell Grants (Undergraduate Students)

• Cost of Attendance (COA) covered by scholarships/grant
  • Students who receive scholarships or grants from non-federal sources that cover their entire COA will not be eligible to receive Pell Grants, even if they meet other eligibility criteria for the program.
• Students with a High Student Aid Index (SAI)
  • Effective May 19, 2026, students whose SAI exceeds twice the maximum Pell Grant award will not be eligible to receive a Pell Grant. The maximum Pell Grant award for 2026-2027 is $7,395. Therefore, a student whose SAI is over $14,970 will not be eligible.