Loan Limits

(a) Terminations of and restrictions on loan authority (1) Termination of authority to make subsidized loans to undergraduate students Section 455(a)(3) of the Higher Education Act of 1965 (20 U.S.C. 1087e(a)(3)) is amended by adding at the end the following: (C) Termination of authority to make subsidized loans to undergraduate students Notwithstanding any provision of this part or part B, except as provided in paragraph (4), for any period of instruction beginning on or after July 1, 2026— (i) an undergraduate student shall not be eligible to receive a Federal Direct Stafford loan under this part; and (ii) the maximum annual amount of Federal Direct Unsubsidized Stafford loans such a student may borrow in any academic year (as defined in section 481(a)(2)) or its equivalent shall be the maximum annual amount for such student determined under paragraph (5)).. (2) Termination of authority to make Federal direct PLUS loans to any student borrower Section 455(a)(3) of the Higher Education Act of 1965 (20 U.S.C. 1087e(a)(3)) is further amended by adding at the end the following: (D) Termination of authority to make Federal Direct PLUS Loans to any student borrower Notwithstanding any provision of this part or part B, except as provided in paragraph (4), for any period of instruction beginning on or after July 1, 2026, a graduate student or professional student shall not be eligible to receive a Federal Direct PLUS Loan under this part.. (3) Restriction on authority to make Federal direct PLUS loans to any parent borrower Section 455(a)(3) of the Higher Education Act of 1965 (20 U.S.C. 1087e(a)(3)) is further amended by adding at the end the following: (E) Restriction on authority to make Federal Direct PLUS Loans to any parent borrower (i) In general Notwithstanding any provision of this part or part B, except as provided in clause (ii) and paragraph (4), for any period of instruction beginning on or after July 1, 2026, a parent, on behalf of a dependent student, shall not be eligible to receive a Federal Direct PLUS Loan under this part. (ii) Exception A parent may receive a Federal Direct PLUS Loan under this part, on behalf of a dependent student, in any academic year (as defined in section 481(a)(2)) or its equivalent if— (I) such student borrows the maximum annual amount of Federal Direct Unsubsidized Stafford loans such student may borrow in such academic year; and (II) such maximum annual amount is less than the cost of attendance of the program of study of such student.. (4) Conforming amendments Section 455(a)(3) of the Higher Education Act of 1965 (20 U.S.C. 1087e(a)(3)) is further amended— (A) in the paragraph heading, by striking Termination of authority to make interest subsidized loans to graduate and professional students and inserting Terminations of and restrictions on loan authority; (B) in subparagraph (A)— (i) in the heading, by striking In general and inserting Termination of authority to make subsidized loans to graduate and professional students; (ii) in the matter preceding clause (i), by striking beginning on or after July 1, 2012; (iii) in clause (i), by striking a graduate and inserting beginning on or after July 1, 2012, a graduate; and (iv) in clause (ii), by striking the maximum annual amount of Federal and inserting beginning on or after July 1, 2012, and ending June 30, 2026, the maximum annual amount of Federal; and (C) in subparagraph (B)— (i) in the heading, by striking Exception and inserting Exception for subsidized loans to individuals enrolled in certain course work. (ii) by striking Subparagraph (A) and inserting For any period of instruction beginning on or after July 1, 2012, and ending June 30, 2026, subparagraph (A). (b) Interim rules for enrolled borrowers Section 455(a) of the Higher Education Act of 1965 (20 U.S.C. 1087e(a)) is amended by adding at the end the following: (4) Interim exception for certain students (A) Application of prior limits Subparagraphs (C), (D), and (E) of paragraph (3), and paragraphs (5) and (6), shall not apply, during the expected time to credential described in subparagraph (B), with respect to an individual who, as of June 30, 2026— (i) is enrolled in a program of study at an institution of higher education; and (ii) has received a loan (or on whose behalf a loan was made) under this part for such program of study. (B) Expected time to credential For purposes of this paragraph, the expected time to credential of an individual shall be equal to the lesser of— (i) three academic years; or (ii) the period determined by calculating the difference between— (I) the program length (as defined in section 420W) for the program of study in which the individual is enrolled; and (II) the period of such program of study that such individual has completed as of the date of the determination under this subparagraph.. (c) Loan limits for unsubsidized loans and certain Federal Direct PLUS Loans (1) Annual and aggregate unsubsidized loan limits Section 455(a) of the Higher Education Act of 1965 (20 U.S.C. 1087e(a)) is further amended by adding at the end the following: (5) Annual and aggregate unsubsidized loan limits (A) Undergraduate students (i) Annual loan limits Notwithstanding any provision of this part or part B, subject to subparagraph (C) and except as provided in paragraph (4), beginning on July 1, 2026, the maximum annual amount of Federal Direct Unsubsidized Stafford loans that an undergraduate student may borrow in any academic year (as defined in section 481(a)(2)) or its equivalent shall be the difference between— (I) the amount of the median cost of college of the program of study in which the student is enrolled; and (II) the amount of the Federal Pell Grant under section 401 awarded to the student for such academic year. (ii) Aggregate limits Notwithstanding any provision of this part or part B, except as provided in paragraph (4), beginning on July 1, 2026, the maximum aggregate amount of Federal Direct Unsubsidized Stafford loans that a student may borrow for programs of study that award an undergraduate credential upon completion of such a program shall be $50,000. (B) Graduate and professional students (i) Annual limits Notwithstanding any provision of this part or part B, subject to subparagraph (C) and except as provided in paragraph (4), beginning on July 1, 2026, the maximum annual amount of Federal Direct Unsubsidized Stafford loans that a graduate student or professional student may borrow in any academic year (as defined in section 481(a)(2)) or its equivalent shall be the amount of the median cost of college of the program of study in which the student is enrolled. (ii) Aggregate limits Notwithstanding any provision of this part or part B, except as provided in paragraph (4), beginning on July 1, 2026, the maximum aggregate amount of Federal Direct Unsubsidized Stafford loans that, in addition to the maximum aggregate amount described in subparagraph (A)(ii)— (I) a graduate student— (aa) who is not (and has not been) a professional student, may borrow for programs of study described in subparagraph (D)(i) shall be $100,000; or (bb) who is (or has been) a professional student, may borrow for programs of study described in subparagraph (D)(i) shall be an amount equal to— (AA) $150,000, minus (BB) the amount such student borrowed for programs of study described in subclauses (I) and (II) of subparagraph (D)(ii); and (II) a professional student— (aa) who is not (and has not been) a graduate student, may borrow for programs of study described in subclauses (I) and (II) of subparagraph (D)(ii) shall be $150,000; or (bb) who is (or has been) a graduate student, may borrow for programs of study described in subclauses (I) and (II) of subparagraph (D)(ii) shall be an amount equal to— (AA) $150,000, minus (BB) the amount such student borrowed for programs of study described in subparagraph (D)(i). (C) Less than full-time enrollment In any case where a student is enrolled in an program of study of an institution of higher education on less than a full-time basis during any academic year, the amount of a loan that student may borrow for an academic year (as defined in section 481(a)(2)) or its equivalent shall be reduced in direct proportion to the degree to which that student is not so enrolled on a full-time basis, rounded to the nearest whole percentage point, as provided in a schedule of reductions published by the Secretary computed for purposes of this paragraph. (D) Definition For purposes of this subsection: (i) Graduate student The term graduate student means a student enrolled in a program of study that awards a graduate credential (other than a professional degree) upon completion of the program. (ii) Professional student The term professional student means a student enrolled in a program of study that— (I) awards a professional degree upon completion of the program; or (II) provides the training described in part 141 of title 14, Code of Federal Regulations (or any successor regulations). (iii) Undergraduate student The term undergraduate student means a student enrolled in a program of study that awards an undergraduate credential upon completion of the program.. (2) Annual and aggregate Federal direct PLUS loans limits for parent borrowers Section 455(a) of the Higher Education Act of 1965 (20 U.S.C. 1087e(a)) is further amended by adding at the end the following: (6) Annual and aggregate Federal direct PLUS loans limits for parent borrowers (A) Annual limits Notwithstanding any provision of this part or part B, subject to paragraph (3)(E) and except as provided in paragraph (4), beginning on July 1, 2026, the maximum annual amount of Federal Direct PLUS loans that a parent may borrow, on behalf of a dependent student, in any academic year (as defined in section 481(a)(2)) or its equivalent shall be the amount equal to— (i) the cost of attendance of the program of study of such student; minus (ii) the maximum annual amount of Federal Direct Unsubsidized Stafford loans such student may borrow in such academic year. (B) Lifetime maximum aggregate limits Notwithstanding any provision of this part or part B, subject to paragraph (3)(E) and except as provided in paragraph (4), beginning on July 1, 2026, the maximum aggregate amount of Federal Direct PLUS loans that a parent may borrow on behalf of dependent students shall be $50,000, without regard to— (i) the number of dependent students on behalf of whom such parent borrows such a loan; or (ii) any amounts repaid, forgiven, canceled, or otherwise discharged on any such loan.. (3) Lifetime maximum aggregate amount for all students Section 455(a) of the Higher Education Act of 1965 (20 U.S.C. 1087e(a)) is further amended by adding at the end the following: (7) Lifetime maximum aggregate amount for all students Notwithstanding any provision of this part or part B, except as provided in paragraph (4), beginning on July 1, 2026, the maximum aggregate amount of loans made, insured, or guaranteed under this title that a student may borrow (other than a Federal Direct PLUS loan, or loan under section 428B, made to the student as a parent borrower on behalf of a dependent student) shall be $200,000, without regard to any amounts repaid, forgiven, canceled, or otherwise discharged on any such loan.. (4) Institutionally determined limits Section 455(a) of the Higher Education Act of 1965 (20 U.S.C. 1087e(a)) is further amended by adding at the end the following: (8) Institutionally determined limits Notwithstanding the annual loan limits described in subparagraphs (A)(i) and (B)(i) of paragraph (5) and subparagraph (A) of paragraph (6), beginning on July 1, 2026, an institution of higher education (at the discretion of a financial aid administrator at the institution) may limit the total amount of loans made under this part for a program of study for an academic year (as defined in section 481(a)(2)) that a student may borrow, and that a parent may borrow on behalf of such student, as long as any such limit is applied consistently to all students enrolled in such program of study..