! Federal Student Aid Changes With The One Big Beautiful Bill Act
Federal Student Aid is changing significantly for students and parents beginning with
the 2026-27 aid year due to the passage of the One Big Beautiful Bill Act (OBBBA)
on July 4, 2025. These changes do not affect student borrowing for the current 2025–2026 academic year.
For more information, please see our One Big Beautiful Bill Act webpage. For timely updates or further information, please refer to the Federal Student Aid website.
Frequently Asked Questions
Beginning with the 2026–2027 academic year, new federal regulations will change how student loan eligibility is calculated for students who enroll less than full-time. These changes are part of the “One Big Beautiful Bill Act” signed into law on July 4, 2025.
This FAQ explains what the changes mean and how your enrollment may impact your federal student loans.
What is changing?
Starting in the 2026–2027 aid year, federal student loan amounts will be reduced based on your enrollment level if you are enrolled less than full-time.
This applies to:
- Federal Direct Subsidized Loans
- Federal Direct Unsubsidized Loans
- Parent PLUS Loans are not reduced based on enrollment level.
What does “loan reduction” mean?
Loan reduction means that the amount of federal student loans you can receive is adjusted based on how many credits you take during the academic year.
If you enroll in fewer classes, you may qualify for a smaller loan amount.
How is my loan eligibility calculated?
Your enrollment is compared to full-time enrollment for the academic year.
At Montco, full-time enrollment for the year is 24 credits.
Formula:
Enrollment credits ÷ 24 credits = Percentage of annual loan eligibility
Example:
- 18 credits for the year ÷ 24 credits = 75%
- You would receive up to 75% of your annual loan limit
Can I receive federal student loans if I am less than half-time?
No. Students enrolled less than half-time are not eligible for federal student loans.
What happens if I drop or withdraw from a class?
Dropping or withdrawing from classes can reduce your current or future loan eligibility depending on whether your loan has already disbursed.
Your enrollment is reviewed before each loan disbursement, so changes to your enrollment may impact future loan funding.
What if I am full-time in one semester but part-time in another?
Your total enrollment for the academic year is used to determine your overall eligibility.
Example:
If you enroll in 12 credits in the fall and plan to take 3 credits in the spring, you may be enrolled in 15 credits for the year. However, since you will be enrolled less than half-time in the spring:
- You may receive loan funding for fall at maximum of 50% of the annual loan limit.
You would not receive loan funding for spring because you will be enrolled less than half-time.
What happens if I drop classes after my loan is disbursed?
Your annual loan eligibility may be recalculated.
Example:
- If you enroll full time in the fall semester and are expected to be enrolled full time in the spring semester, you may receive the full-time disbursement for the fall semester.
- If you drop or withdraw to half-time status in the fall semester after disbursement, your projected annual enrollment will change from 24 credits to 18 credits, which means that you would only qualify for 75% of the annual loan limit.
This could reduce how much loan funding you would receive in future semesters.
How can I learn more?
- Contact the Financial Aid Office
- Speak with your academic advisor
- Attend a live Zoom session hosted by Financial Aid