Federal Student Loan Changes for 2026-2027

Graduate Plus Loan program

• As of July 1, 2026 the Grad PLUS loan program is eliminated for new direct loan borrowers
• A “legacy” or “grandfather” provision applies:
  • If you have borrowed a direct loan in your current program of study and maintained enrollment before July 1, 2026, you can borrow under the old rules for up to three academic years (6 trimesters) or until you complete your program, whichever comes first.
• Professional annual & aggregate loan limits
  • Professional Students (Doctor of Chiropractic Program):
    • Institutional Loan Limit: $20,000 (per term)
    • Lifetime Limit: $200,000

Direct Loan Program

• Parent Plus Loan Annual & Aggregate Limit
  • All parents may borrow for each dependent:
    • Annual Limit: $20,000
    • Aggerate Limit: $65,000
  • Legacy provision:
    • If student or parent borrowed a direct loan in your current program of study and maintained enrollment before July 1, 2026, you can borrow under the old rules for up to three academic years (6 trimesters) or until you complete your program, whichever comes first.
• Lifetime Loan Limits
  • $257,500 lifetime borrowing limit on all federal student loans, excluding parent plus loan amounts.

Pell Grant Eligibility

• Foreign Income
  • Requires that foreign income be included in the AGI used to calculate Pell Grant eligibility.
• Student with a high Student Aid Index
  • Prevents students from receiving Pell Grants if their Student Aid Index (SAI) exceeds twice the maximum Pell Grant award.
• Full Cost of Attendance Scholarships/Grants
  • Students who receive grants or scholarships from non-federal sources covering their entire cost of attendance (COA) are ineligible to receive a Pell Grant, even if otherwise eligible for the program.

You may be classified as a legacy borrower if:

• You were enrolled in Palmer’s D.C. program on or before June 30, 2026, and
• You received at least one Direct Loan disbursement (Unsubsidized or Grad PLUS) for the D.C. program before July 1, 2026, and
• You maintain continuous enrollment in the D.C. program without withdrawing or taking a leave of absence.

Legacy borrowers retain access to previous loan limits for a limited number of remaining terms (see Expected Time to Credential below).

If you meet the legacy criteria, you may continue borrowing under the current federal limits:

• Unsubsidized Loan: $16,500 per term
• Graduate PLUS Loan: Still available
• Aggregate Loan Limit (Sub/Unsub): $224,000 (combined undergraduate + graduate)

This allows eligible continuing students to maintain familiar borrowing levels during the transition period.

Students who do not qualify as legacy borrowers — including most new students beginning after Summer 2026 — will fall under the new federal loan structure:

• Unsubsidized Loan: $20,000 per term
• No Graduate PLUS Loan Eligibility
• Unsubsidized Aggregate Limit: $200,000 (excludes undergraduate borrowing)
• Lifetime Federal Loan Limit: $257,000 total (federal loans combined; excludes Parent PLUS)

Because Grad PLUS is no longer available to new borrowers, some students may need to explore private loans to cover remaining educational expenses.

Federal rules limit how long a student may continue borrowing under legacy provisions. Beginning July 1, 2026, your expected time to credential is defined as the lesser of:

• Six trimesters, or
• Ten total trimesters minus the number of trimesters enrolled in the D.C. program as of July 1, 2026.

Examples

1. Student enrolled for two terms as of July 1, 2026
   • Eligible for six more terms of legacy borrowing
   • Any additional terms needed beyond six will fall under the new federal limits. 
2. Student enrolled for eight terms as of July 1, 2026
   • Eligible for two more terms of legacy borrowing
   • Borrowing after those two terms will transition to the new limits

• Standard Repayment Plan:
  • Fixed payments over 10-25 years, depending on loan balance
• Repayment Assistance Plan (RAP):
  • A new income-driven repayment plan where payments range from 1-10% of income, with forgiveness after 30 years
• Current Borrowers:
  • Current borrowers with older loans (disbursed before July 1, 2026) can remain on existing plans (e.g, IBR, SAVE, PAYE) until July 1, 2028; afterward, they’ll be moved to RAP if they don’t choose another plan.

These federal changes reshape how D.C. students plan their borrowing — but our commitment to your success remains unchanged. Whether you continue under legacy limits or transition to the new structure, Palmer’s Financial Aid Office is here to help you:

• Understand your remaining borrowing eligibility
• Plan for any funding gaps resulting from federal changes
• Evaluate private loan options (if needed)
• Stay on track with continuous enrollment to maintain legacy status (if applicable)