What’s Changing?
Starting July 1, 2026, a new federal law called the One Big Beautiful Bill Act (OBBBA) changes how student loans are calculated.
Please be aware that these new regulations are still in draft form and may change before they are finalized. We do not expect to have final rules until June, with an effective date of July 1st. We will update this article as additional guidance is received.
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Your annual loan limit will be adjusted to align with your actual registered hours compared to a full-time course load.
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If you take fewer classes, your loan limit will be reduced proportionally (this is called 'proration').
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If you enroll less than full-time you will no longer qualify for the full annual loan limit.
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As a graduate student, you’ll now have a lifetime borrowing limit, and Graduate PLUS loans will be phased out.
Baker College is committed to helping you understand these changes so you can plan your educational expenses with confidence.
How Your Loan Amount is Determined
Your federal loan eligibility is now calculated based on the percentage of full-time credits you are enrolled in during the academic year.
Baker College Full-Time Credit Standards:
Undergraduate students: 24 credits per academic year
Graduate students: 18 credits per academic year
Loan Proration Formula:
Step 1: Credits You Take Full-Time Credits 100 % Your Enrollment Percentage
Step 2: Your Enrollment Percentage Annual Loan Limit Your Loan Eligibility
Example (Undergraduate Student):
If you enroll in 12 credits for the academic year:
12 24 100 % 50% enrollment
If your annual federal loan limit is $5,500:
50% $5,500 $2,750 Annual Loan Eligibility
Because you’re enrolled at half-time, you’re eligible for half of the full-time annual loan limit.
2026-2027 Federal Loan Comparison
Below is an example of how loan amounts compare for full-time and half-time students.
- Full-Time = 24 credits per academic year (12 credits per semester)
- Half-Time = 12 credits per academic year (6 credits per semester)
Federal Loan Comparison
| Student Type & Grade Level |
Full-Time Annual Loan |
Half-Time Annual Loan |
Full-Time Loan per Semester (12 credits) |
Half-Time Loan Per Semester (6 credits) |
| 1st Year (Dependent) |
$5,500 |
$2,750 |
$2,750 |
$1,375 |
| 1st Year (Independent) |
$9,500 |
$4,750 |
$4,750 |
$2,375 |
| 2nd Year (Dependent) |
$6,500 |
$3,250 |
$3,250 |
$1,625 |
| 2nd Year (Independent) |
$10,500 |
$5,250 |
$5,250 |
$2,625 |
| 3rd Year+ (Dependent) |
$7,500 |
$3,750 |
$3,750 |
$1,875 |
| 3rd Year+ (Independent) |
$12,500 |
$6,250 |
$6,250 |
$3,125 |
| Parent Plus Loan |
$20,000 |
$10,000 |
$10,000 |
$5,000 |
| Graduate Student |
$20,500 |
$13,735 |
$10,250 |
$6,765 |
- To qualify for a loan, you must attend at least half-time each semester (6 undergraduate credits or 5 graduate credits)
- Your Loan cannot exceed 50% of the annual limit during any single semester.
Important Information for Graduate Students
The OBBBA has changed federal student loans for graduate students. Borrowing limits are now in place, and Graduate PLUS Loans are being phased out. But don’t worry, if you meet the grandfather clause, you may still be able to borrow under the old rules.
Graduate PLUS "Grandfather" Clause
If you had a Direct Loan before July 1, 2026, you can keep using Graduate PLUS Loans for your current program for up to three years or until you graduate or leave school, whichever comes first.
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This only applies to the program you’re currently in. Starting a new program after July 1, 2026 means you won’t be able to get Graduate PLUS Loans for that new program.
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You need to stay enrolled continuously to keep your eligibility.
Lifetime Loan Limits
Here’s the new borrowing cap you need to know:
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Graduate unsubsidized loans: A maximum borrowing limit of $100,000 applies throughout the duration of your graduate program.
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All Title IV loans (except PLUS loans): The total limit is $257,500 for your entire education.
If you qualify under the grandfather clause, your borrowing limits from before July 1, 2026, still apply.
Do You Need to Do Anything?
No action is required. Your loan eligibility is automatically calculated based on your registered credits.
If you add or drop classes, your loan amount may change to reflect your updated enrollment level.
If you’re unsure how your enrollment choice may impact your funding, our Financial Aid team is here to help you review your options.
Where to Find Official Information
This page reflects Baker College’s current understanding of regulations issued by the U.S. Department of Education. Federal guidance may continue to evolve.
For the most up-to-date and official information about federal student aid, visit studentaid.gov.