2026-2027 Financial Aid Updates

Who is affected

• Students who borrow new federal student loans on or after July 1, 2026
• Current borrowers entering repayment in the future
• Existing borrowers may have the option to choose a new repayment plan

What is changing

Borrowers who receive new federal student loan disbursements on or after July 1, 2026, will have access to two repayment options:

• A new standard repayment plan
• A new income-driven repayment plan, called the Repayment Assistance Plan (RAP)

These new options are designed to provide structured repayment timelines and a repayment option based on income.

Repayment options for current borrowers

• Standard Repayment Plan
• Graduated Repayment Plan
• Extended Repayment Plan
• Income-Based Repayment (IBR) Plan

Current borrowers may also have the option to enroll in the new Repayment Assistance Plan (RAP), if eligible.

What this means for you

Your repayment options will depend on when you borrow your federal student loans. If you borrow new loans starting July 1, 2026, you will choose from the new repayment plan options. If you already have federal student loans, you may be able to keep your current repayment plan or choose a new option if it better fits your financial situation.

Your federal loan servicer will provide detailed information about your available repayment options when you enter repayment.

Student loan servicers will be able to provide the most current information as students enter the repayment process.

Who is affected

• Graduate students who begin borrowing federal student loans on or after July 1, 2026
• Current graduate students may qualify for temporary legacy eligibility (see below)

What is changing

Graduate students can continue to borrow up to $20,500 per year in Federal Direct Unsubsidized Loans. However, a new lifetime borrowing limit of $100,000 is now in place for graduate students.

This lifetime limit applies only to graduate borrowing and does not include loans received as an undergraduate student.

Legacy provision for current graduate students

Graduate students who received a Federal Direct Loan disbursement before July 1, 2026, may continue to borrow under the current lifetime limit of $138,500 (which includes both undergraduate and graduate loans) if they meet legacy eligibility requirements.

Legacy eligibility allows students to continue borrowing under the higher limit for:

• Up to three academic years, or
• Until completing their current graduate program,
• Whichever comes first

Students must remain continuously enrolled in the same program to keep legacy eligibility. If you withdraw, stop attending, or change programs, you will become subject to the new $100,000 graduate lifetime limit.

What this means for you

If you are a new graduate student borrowing federal loans starting July 1, 2026, you will have a lower lifetime borrowing limit than previous students. If you are currently enrolled and have already received federal graduate loans, you may be able to continue borrowing under the existing limit if you remain continuously enrolled in your current program.

Who is affected

• Parents of dependent undergraduate students who borrow Parent PLUS Loans on or after July 1, 2026
• Current students whose parents are borrowing Parent PLUS Loans may qualify for legacy eligibility (see below)

What is changing

Parent PLUS Loans will have new federal borrowing limits:

• A maximum of $20,000 per year per student
• A lifetime borrowing limit of $65,000 per student

Previously, parents could borrow up to the student’s full cost of attendance minus other financial aid. The new limits restrict the total amount parents can borrow through the federal Parent PLUS Loan program.

Legacy provision for current students

Students whose parent received a Parent PLUS Loan disbursement before July 1, 2026, may continue borrowing under the current limits if they meet legacy eligibility requirements.

Legacy eligibility allows parents to continue borrowing up to the full cost of attendance (minus other aid) for:

• Up to three academic years, or
• Until the student completes their current undergraduate degree,
• Whichever comes first

Students must remain continuously enrolled at the same degree level (such as a bachelors degree program) to maintain legacy eligibility. Changing majors within your degree level will not impact eligibility. If you withdraw, stop attending, or are no longer enrolled in the same degree level, the new annual and lifetime borrowing limits will apply.

What this means for you

If your parent plans to borrow a Parent PLUS Loan starting July 1, 2026, there will be new limits on how much they can borrow each year and over time. If your parent has already borrowed a Parent PLUS Loan for your current degree, they may be able to continue borrowing under the existing limits if you remain continuously enrolled.

Who is affected

• Students who receive scholarships and grants that fully cover their cost of attendance
• Students who may otherwise qualify for a Federal Pell Grant

What is changing

Beginning July 1, 2026, students whose total non-federal grants and scholarships equal or exceed their full cost of attendance will no longer be eligible to receive a Federal Pell Grant.

Non-federal aid includes scholarships and grants from sources such as:

• Colleges and universities
• State grant programs
• Private scholarships
• Outside organizations

What this means for you

If your scholarships and other non-federal aid fully cover your cost of attendance, you may no longer qualify for a Pell Grant. Students whose financial need is not fully covered by other aid may still be eligible for Pell Grant funding.

MSUM’s Office of Scholarship and Financial Aid will review your eligibility and notify you of any changes to your financial aid offer.

Who is affected

• Undergraduate and graduate students enrolled less than full time
• Students who withdraw from courses or reduce their enrollment during the academic year

What is changing

Beginning with the 2026-2027 academic year, Federal Direct Loan amounts will be based on your actual enrollment level for the academic year, rather than assuming full-time enrollment.

Your annual loan limits will be calculated using the following formula:

Credit hours enrolled for the academic year ÷ Credit hours considered full-time X Annual loan limit (100)

This means students enrolled less than full time may have a lower annual loan limit.

Example: How enrollment changes may affect loan eligibility

A dependent first-year student qualifies for $5,500 per year if enrolled full time.

• The student enrolls in 12 credits (full time) for fall semester
• After receiving their fall loan, the student drops to 9 credits
• The student enrolls in 12 credits for spring semester

Full-time academic year: 12 + 12 = 24 credits

Loan eligibility calculation: 21 ÷ 24 = 87.5%

87.5% of $5,500 = $4,812 annual loan limit

Because the student already received $2,750 in the fall, their remaining eligibility for spring would be $2,062.

What this means for you

If you enroll less than full time or withdraw from courses, your federal loan eligibility may be reduced. Your Financial Aid Offer will reflect your enrollment level, and adjustments may occur if your enrollment changes.

Contact MSUM’s Office of Scholarship and Financial Aid if you are considering changing your enrollment and have questions about how it may affect your aid.

Who is affected

• Graduate students who plan to borrow federal loans on or after July 1, 2026
• Current graduate students who may qualify for legacy eligibility (see below)

What is changing

The Federal Graduate PLUS Loan program will be discontinued starting July 1, 2026.

Graduate students will still be eligible to borrow up to $20,500 per year through Federal Direct Unsubsidized Loans. Students who need additional funding beyond this amount may consider other options, such as:

• Scholarships
• Assistantships
• Payment plans
• Private education loans

Legacy provision for current graduate students

Graduate students who received a Graduate PLUS Loan disbursement before July 1, 2026, may continue borrowing through the Graduate PLUS Loan program if they meet legacy eligibility requirements.

Legacy eligibility allows continued borrowing for:

• Up to three academic years, or
• Until completing your current graduate program,
• Whichever comes first

Students must remain continuously enrolled in the same graduate program to maintain eligibility. If you withdraw, stop attending, or change programs, you will no longer be eligible to receive Graduate PLUS Loans.

What this means for you

If you are a graduate student borrowing federal loans starting July 1, 2026, Graduate PLUS Loans will no longer be available. If you are currently enrolled and have already received a Graduate PLUS Loan, you may be able to continue borrowing under legacy eligibility if you remain continuously enrolled in your current program.

MSUM’s Office of Scholarship and Financial Aid can help you explore alternative funding options.