Important News about Federal Student Loans

The recently enacted One Big Beautiful Bill Act (OBBBA) brings several changes that may affect you, including how loan amounts are calculated based on your enrollment, updates to borrowing limits, and new rules for graduate student loans.

What’s Changing?

Under the new rules, your federal loan eligibility will be more closely tied to how many credits you’re taking. If you’re enrolled less than full-time in courses that count toward your degree, your loan amount will be reduced to match.

Full-time enrollment is defined as:

• Undergraduate: 12 credit hours per semester
• Graduate: 6 credit hours per semester

What This Means for You

• If you enroll in fewer credits, your loan eligibility may be reduced (prorated).
• Changes in enrollment can impact your total financial aid eligibility.

Keep In Mind: You must be enrolled at least half-time to be eligible for federal loan funding.

Enrollment Changes Matter

Any changes to your enrollment (dropping a course, withdrawing, or going part-time) could:

• Trigger a recalculation of your loan
• Reduce future disbursements
• Result in an unexpected balance

Parent PLUS Loan Changes

• New borrowing limits will apply to the Parent PLUS loan
  • $20,000 per student, per year
  • Lifetime borrowing up to $65,000 per student
• Parents may continue borrowing the Parent PLUS Loan under pre-OBBBA rules only if all of the following apply:
  • You were enrolled in your program at Montclair as of June 30, 2026, and
  • You received at least one federal loan disbursement for that same program before July 1, 2026
• If eligible under this Legacy/Exception Provision:
  • The Parent may continue borrowing the Parent PLUS Loan under pre-OBBBA rules for:
    • Up to 3 academic years, or
    • The remainder of your expected time to degree completion,
    • Whichever is shorter
• Any interruption to your enrollment at Montclair will end the legacy/exception status and you will be subject to the new rules.

Graduate PLUS (Grad PLUS) Loans Eliminated

• The Grad PLUS loan will be discontinued as of July 1, 2026.
• You may continue borrowing Grad PLUS Loans under pre-OBBBA rules only if all of the following apply:
  • You were enrolled in your program at Montclair as of June 30, 2026, and
  • You received at least one federal loan disbursement for that same program before July 1, 2026
• If eligible under this Legacy/Exception Provision:
  • You may continue borrowing Grad PLUS Loans for:
  • Up to 3 academic years, or
  • the remainder of your expected time to degree completion,
  • Whichever is shorter
• Any interruption to your enrollment at Montclair will end your legacy/exception status and you will be subject to the new rules.

What This Means for You

• If you have never borrowed a federal loan for your current program at Montclair before July 1, 2026, you will not be eligible for the Grad PLUS loan moving forward.
• If you meet the legacy/exception criteria, your eligibility will be limited in duration.

Here’s What We Recommend

• Review your financial aid award carefully each semester.
• Enroll in all of the credits you plan to take before the end of add/drop.
• Families may need to plan for additional resources to cover any remaining balance, such as:
  • Payment plans
  • Savings or current income
  • Private education loans

Learn More: Visit our One Big Beautiful Bill Act web page for more information.