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.
Federal Student Aid has published updates and FAQs. You can view the updates on their OB3 Updates website.
Beginning July 1, 2026, the amount you can borrow in Federal Direct Student Loans will depend on how many credits you’re enrolled in. To receive your full loan amount, you must be enrolled full time (12 credits for undergraduate and professional students, 10 credits for graduate students). If you enroll in fewer credits, your loan amount will be reduced based on your actual course load. There are no exceptions to this policy.
To qualify for federal student loans at all, you must be enrolled at least half time (6 credits for undergraduate and professional students, and 5 credits for graduate students).
This policy uses what’s called a “schedule of reduction,” which means your loan eligibility can change throughout the academic year if your enrollment changes. For example, if you start autumn quarter full-time but later drop a class or withdraw, your loan amounts for winter and spring quarters may be reduced.
