Federal Student Loan Changes Take Effect July 2026

SUNY Canton Financial Aid representatives provide a summary of higher-education loan changes from recent legislation.

New federal student loan rules taking effect July 1, 2026, will reshape how students and families borrow and repay for college, introducing reduction in loan limits for students enrolled less than full time, caps for Parent PLUS loans, and reducing repayment flexibility for future borrowers.

SUNY Canton’s Financial Aid website has been updated with the latest information, please view the Changes to Student and Parent Federal Loan page for a comprehensive explanation of the changes.

A major change for undergraduate students is the new schedule of loan reduction (SOR), which will adjust loan eligibility for students enrolled less than full time and for those whose enrollment status changes during the year, such as dropping or withdrawing from a class. Any enrollment changes have the potential of reducing either current semester or future semester loan eligibility.

Parents will face limits moving forward. Those who borrow Parent PLUS loans after July 2026 will be capped at $20,000 per year and $65,000 total per student. Families already borrowing before that date may continue under current rules through a legacy provision.

Repayment options have also changed. Borrowers with loans issued on or after July 1, 2026, will generally be limited to just two plans: a new standard repayment plan and a Repayment Assistance Plan. Parent PLUS borrowers will be restricted even further, with access only to the standard plan.

The new standard repayment option does not qualify for Public Service Loan Forgiveness, meaning parents who take out new PLUS loans after July 2026 could lose eligibility, even if they had previously been on track for forgiveness.

Additional updates begin in 2027, when economic hardship and unemployment deferments are eliminated and forbearance becomes more limited.

College officials note that families with multiple students may encounter different borrowing limits depending on timing, and some may need to consider private lending options to cover remaining costs.

With major changes on the horizon, students and families planning for fall 2026 and beyond are encouraged to review their borrowing strategies carefully and explore all available financial aid resources.