Changes to Federal Financial Aid

Some families may temporarily avoid the new limits. To qualify:

• The student must remain continuously enrolled in the same program at the same institution as of June 30.
• Either the parent received a Parent PLUS Loan for that program before July 1, or the student received a Direct Loan (subsidized or unsubsidized) for that program before July 1.

If eligible, families may continue borrowing above the new caps for up to three academic years if the student remains continuously enrolled.

The exception ends after three academic years or if the student withdraws, changes programs, transfers or graduates. At that point, the $20,000 annual and $65,000 total limits apply.

Parent PLUS Loans borrowed on or after July 1 – including federal consolidation loans that include Parent PLUS Loans – can only be repaid under a single new fixed repayment plan.

What is Changing?

• The only repayment option available for Parent PLUS Loans taken out on or after July 1 is a new tiered standard repayment plan.
• The tiered standard repayment plan offers a fixed monthly payment over 10 to 25 years, based on the total outstanding loan balance.
• If a borrower has existing Parent PLUS Loans and borrows a new Parent PLUS Loan on or after July 1, all Parent PLUS Loans must be repaid under the same plan.

Please note: Families who have Parent PLUS Loans in repayment and borrow a new Parent PLUS Loan on or after July 1 will have all of their Parent PLUS Loans moved to the tiered standard repayment plan, which may change their monthly payment amount.

What is Changing?

• Borrowers who consolidate their Parent PLUS Loans into a Direct Consolidation Loan before July 1 and enroll in the Income-Contingent Repayment (ICR) plan may remain in ICR through June 30, 2028.
• After June 30, 2028, the ICR plan will sunset, and borrowers will be moved to the Income-Based Repayment plan.

The new tiered standard repayment plan does not qualify for Public Service Loan Forgiveness (PSLF). As a result, borrowing a new Parent PLUS Loan on or after July 1 may prevent a borrower from receiving PSLF – even if they have already made qualifying payments – because all Parent PLUS Loans must be repaid under the new tiered standard repayment plan.

To preserve PSLF eligibility, a parent borrower must:

• Have consolidated Parent PLUS Loans into a Direct Consolidation Loan and enrolled in the Income-Contingent Repayment plan prior to July 1.
• Not borrow a new Parent PLUS Loan on or after July 1.

Please note: Families who are planning to borrow on or after July 1 but wish to preserve PSLF eligibility should carefully consider other financing options and speak with the Office of Financial Aid.

Beginning July 1:

• The Graduate PLUS Loan program will be eliminated, unless a student qualifies for a limited exception.
• The annual Direct Unsubsidized Loan limit remains $20,500.
• A $100,000 aggregate limit will apply to Direct Unsubsidized Loans for graduate study.
• A $257,500 lifetime limit will apply to all Federal Direct Loans (excluding Graduate PLUS and Parent PLUS loans) borrowed across all levels of study.

Students who currently rely on Graduate PLUS loans should carefully review whether they qualify for the limited exception and understand what circumstances could cause them to lose eligibility. Students who qualify for the limited exception are exempt from the new aggregate and lifetime limits during their exception period.

The law allows some students to continue borrowing through the Graduate PLUS program – and remain exempt from the new aggregate and lifetime limits – for up to three years, through their time to completion.

To qualify for the limited exception, a student must:

• Remain continuously enrolled in the same program of study at the same institution in which they were enrolled as of June 30.
• Have had a Direct Loan (Direct Unsubsidized or Graduate PLUS) disbursed for that same program before July 1.

Can students qualify for the limited exception if they do not currently meet the criteria?

Possibly. Taking out a federal student loan (Direct Unsubsidized or Graduate PLUS) before June 30 may allow a student to retain access to Graduate PLUS Loans and current borrowing limits under the limited exception.

However, borrowing solely to “lock in” eligibility is not the right choice for everyone. Federal student loans have long-term financial consequences. Students should speak with the Office of Financial Aid before deciding to borrow.

What happens when a student no longer qualifies for the limited exception?

After three academic years – or earlier if the student withdraws, ceases enrollment, changes programs or completes their degree – they will no longer be eligible for Graduate PLUS Loans and will become subject to the new aggregate and lifetime borrowing limits.

Students who do not borrow a new federal Direct Loan on or after July 1 may continue to access current repayment options, including:

• Standard (10-year), Graduated or Extended Repayment
• Income-Based Repayment
• Pay As You Earn (PAYE)
• Income-Contingent Repayment (ICR)

The PAYE and ICR plans will sunset effective July 1, 2028. Borrowers enrolled in PAYE or ICR must select another eligible repayment plan before July 1, 2028, or they will automatically be moved to the Repayment Assistance Plan.

Beginning in July 2026, these borrowers may also choose to enroll in:

• Repayment Assistance Plan
• Tiered Standard Repayment

Salve does not offer any programs that are classified as “professional degree” programs under the recent changes. Because of this, the provisions in the new law that specifically affect professional degree programs do not apply to Salve’s graduate or doctoral students.

Our graduate and doctoral programs remain structured as they were prior to these legislative updates, and students enrolled in these programs are not subject to the changes tied to the federal redefinition of professional degrees.