OB3 & FAQ

No. These federal changes only affect future aid beginning with the 2026-27 academic year. Aid already disbursed will not change.

No. University scholarships are awarded according to university policies and are not affected by these federal changes.

Yes. However, beginning in 2026-27, your annual eligibility may be reduced if you are enrolled less than full time. 

If you enroll less than full time, your federal loan amount will be reduced based on your credit hours. Your loans will be prorated if your enrollment at census is:

• Undergraduate: Less than 12 credit hours 
• Graduate: Less  8 credit hours

• If you drop or withdraw from classes after your loan is disbursed, your eligibility may change. This could require adjustments to a future (second) disbursement.

Yes. Parent PLUS Loans remain available, but as of July 1, 2026, new annual and lifetime borrowing limits apply to new Parent PLUS borrowers.

Graduate PLUS Loans will no longer be available to new borrowers as of July 1, 2026.

Students who qualify for the federal legacy provisions may continue borrowing under previous rules for a limited period.

Federal Legacy Provision Limited Exception for Existing Borrowers

To qualify, a student must meet all of the following conditions:

• Be enrolled in the same program of study at UM-Dearborn as of June 30, 2026.
• Have borrowed a Direct Loan for that program before July 1, 2026.
• Have not had a break in enrollment in the same program/school (an approved leave of absence is allowed).
• Remain continuously enrolled in the same program/school until you finish your program or for up to three academic years (whichever comes first).

• Students with a Student Aid Index (SAI) greater than twice the maximum Pell Grant amount will not qualify for Pell Grant funding.
• Students whose scholarships and grants already cover the full cost of attendance may not be eligible for additional Pell Grant funds.
• If you or your FAFSA contributors report foreign income, all income must be included in the Adjusted Gross Income (AGI) used to determine Pell eligibility.

All students initially receive a financial aid offer based on full-time enrollment. Your individual eligibility is automatically calculated based on your FAFSA results and academic record.

How you proceed depends on your enrollment plans:

• If you plan to be Full-Time: You do not need to take extra action. Your eligibility is already accurately reflected in your current financial aid offer.
• If you plan to be Part-Time: Please schedule an appointment with a financial aid advisor to discuss how your aid will change.

Important Timeline for Part-Time Students & Federal Loans

• One week before the term starts: The Office of Financial Aid & Scholarships will email all part-time students with federal loans.
• Action Required: You will be asked to complete a Schedule of Reduction Form to confirm your exact enrollment for both Fall and Winter.
• The Add/Drop Deadline: If you do not submit the form by the end of the Fall add/drop period, the office will automatically adjust your aid to match your actual registered credits and assume the same for Winter.

While these changes are important to understand, only a small percentage of our students will be impacted. Approximately 4% of our undergraduates and 15% of graduate students could see changes as a result of these new federal rules. 

If you have additional questions, the One-Stop is available to answer your general financial aid questions at [email protected] or 313-593-5300. Students impacted by the changes will be supported in escalating to a Financial Aid Advisor for additional guidance. 

Federal Pell Grant

Beginning in 2026-27, Students whose Student Aid Index (SAI) exceeds the federal eligibility threshold (twice the annual maximum Pell Grant award) will no longer qualify for a Pell Grant.

For the 2026-27 academic year, the maximum Pell Grant award is $7,395. So students with an SAI 14,790 or above will not qualify for Pell. 

Federal Direct Loans

What stays the same

• Annual undergraduate borrowing limits are not changing.
• Aggregate (lifetime) undergraduate borrowing limits are not changing.

What's changing

Part-Time Students Loan Eligibility 

Beginning with the 2026-2027 academic year, Federal Direct Subsidized and Unsubsidized Loan eligibility will be adjusted based on your enrollment.

Students enrolled less than full-time will receive a prorated annual loan amount based on the number of credits they are enrolled in.

Parent PLUS Loans

As of July 1, 2026, new federal borrowing limits apply.

These limits apply per student, regardless of how many parents borrow.

If your parent reaches the new lifetime borrowing limit, you are not eligible for additional Federal Direct Loan funds.

Federal Direct Unsubsidized Loans

Graduate students may continue borrowing up to:

• Annual limit: $20,500
• Aggregate limit: $100,000 (undergraduate borrowing is not included in this limit)

Professional students are subject to separate federal borrowing limits.

Lifetime Federal Loan Limit

As of July 1, 2026, a combined federal student loan lifetime limit of $257,500 applies across undergraduate, graduate, and professional Federal Direct Loans.

This total includes:

• Direct Subsidized Loans
• Direct Unsubsidized Loans
• Graduate PLUS Loans

Parent PLUS Loans borrowed by parents are not included in this lifetime limit.

Graduate PLUS Loans

Graduate PLUS Loans are being phased out.

Students who become new borrowers after July 1, 2026 will no longer be eligible to borrow Graduate PLUS Loans.

Students who borrowed eligible Federal Direct Loans before July 1, 2026, may continue borrowing under the previous rules if they qualify for the federal legacy provisions described below.

Beginning with the 2026-27 academic year, federal loan eligibility for graduate and professional students will also be prorated based on enrollment.

Your annual loan eligibility will be adjusted according to the number of credits you are enrolled in during the academic year.

As of July 1, 2026, changes to federal repayment options will affect both new and continuing borrowers.

These changes include:

• A new Standard Repayment Plan
• A new Repayment Assistance Plan (RAP)
• Phase-out of existing Income-Contingent Repayment plans beginning in 2028

Parent PLUS borrowers who receive new loans after July 1, 2026, will repay those loans through the Standard Repayment Plan.

Additional repayment options remain available for many borrowers who only have loans first borrowed before July 1, 2026.

Students (or parents) who borrowed eligible federal loans before July 1, 2026, may continue borrowing under the previous federal rules.

In general, legacy borrowers may continue borrowing under prior loan limits:

• for up to three academic years, or
• until they complete their current academic program,

whichever occurs first.

To remain eligible, students must remain continuously enrolled in the same academic program. Changes in enrollment status, extended breaks in enrollment, or changes in academic programs may affect eligibility under these provisions.

Important note: An institution or financial aid office cannot appeal or override a student’s legacy status.