The 2027-28 FAFSA opened on 23 September, the earliest launch in the program’s history, so next year’s aid offers are being built now. They will be the first full cycle under the federal loan limits that took effect on 1 July. These are the five questions we expect your cabinet to ask, each with the source you would need to answer it.
This briefing reflects its sources as of 30 September 2026. The Department has not yet put in writing how completed time is counted for continuing students, the subject of question 2. Check Federal Student Aid’s guidance before relying on it.
1. What changed on 1 July?
Public Law 119-21 ended Grad PLUS for new borrowers and put hard limits on the loans that remain. The Congressional Research Service summary (R48727, January 2026) sets them out:
| Loan | From 1 July 2026 | Before |
|---|---|---|
| Grad PLUS | Ended for new borrowers. | Up to cost of attendance |
| Graduate | $20,500 a year, $100,000 in total. | $20,500 a year |
| Professional (law, medicine and similar) | $50,000 a year, $200,000 in total. | $20,500 a year, more in some health professions, plus Grad PLUS |
| Lifetime, all federal student loans | $257,500, not counting loans taken as a parent. | No cap on Grad PLUS |
| Parent PLUS | $20,000 a year, $65,000 per dependent student. | Up to cost of attendance |
| Less than full-time | Reduced in proportion to enrollment. Parent PLUS is not reduced. | Full annual limits |
Source: Congressional Research Service, R48727.
New borrowers also choose between only two repayment plans: a new standard plan, or the new Repayment Assistance Plan. Existing plans stay open until 30 June 2028 to current borrowers who take no new loan.
2. Who keeps the old limits, and for how long?
A student who, as of 30 June 2026, was enrolled in a program and had borrowed for it on or before that date keeps the old limits for the lesser of three academic years or the time remaining to finish. How that time is counted is where students are being caught. The law measures it as the program’s length, meaning the time a full-time student needs, minus the part already completed. The Department’s written guidance counts the part completed as time in the program; after an August webinar, Inside Higher Ed reported that the Department appears to count it in credit hours instead. Inside Higher Ed (21 September) reported a senior who lost Parent PLUS for her final year because her credit hours, including an associate degree earned in high school, had passed 120.
3. What will our offer letters say about the gap?
Families discover it one of two ways: on the offer, or when a PLUS application is refused weeks before term. Saint Louis University told Inside Higher Ed its aid office took 5,000 calls about the changes, as many as during the troubled 2024 FAFSA launch, and covered some students with emergency grants and loans. The question for the cabinet is whether the offer shows the remaining cost in dollars, and what options sit next to it.
4. Can we set our own limits?
Yes, and it is new. From 1 July 2026 an institution may set a lower Direct Loan limit for a particular program of study and academic year, as long as it applies the limit consistently to every student in that program (CRS R48727). It is a tool for programs where the debt a student can now carry is out of line with what graduates earn. The law leaves the decision to the financial aid administrator; which programs it fits is a question for the academic side as well.
5. Who is hit hardest here?
It depends on your mix. Parent PLUS was the gap-filler at many small private colleges, and it is now capped at $20,000 a year. Graduate and professional programs lose Grad PLUS, and a professional student can reach the $257,500 lifetime limit before finishing: Inside Higher Ed’s example was an evening law student at Loyola Marymount. Community colleges meet it through part-time students, whose limits are now reduced in proportion to their enrollment. Knowing which of the three is yours is most of the answer.
The offer letter is where this becomes real. A family that learns about the gap weeks before term, from a refused PLUS application, remembers who told them and how late. Put the gap on the offer, in dollars, with the options beside it, even when the options are not good ones. It is a harder letter to write and a much easier conversation to have.
Sources & further reading
- U.S. Department of Education: “U.S. Department of Education Announces Earliest FAFSA Launch in Program History for the Second Consecutive Year”, 23 September 2026
- Public Law 119-21, section 81001
- Congressional Research Service: R48727, “Amendments to the Higher Education Act Made by P.L. 119-21, the FY2025 Budget Reconciliation Law”, updated 8 January 2026
- Federal Student Aid: Frequently Asked Questions, Reducing Annual Loan Limits for Less-than-Full-Time Enrollment, July 2026
- Federal Student Aid: Frequently Asked Questions, Loan Limits, 20 May 2026
- Inside Higher Ed: “ED Clarifies How Current Students Can Access Uncapped Loans”, 17 August 2026
- Inside Higher Ed: “Under New Loan Limits, Students Struggle to Finance Final Year”, 21 September 2026
- Federal Student Aid: Dear Colleague Letter GEN-26-02, “Implementing New Institutional Authority to Set Program-Level Federal Student Loan Limits”, 26 June 2026
Sources checked September 30, 2026. The exercises and recommended next steps are The School Guru’s editorial suggestions. Check the linked authority for current requirements and institution-specific applicability.