Federal Student Loan Changes
Important Federal Financial Aid Changes for 2026–2027
Federal financial aid rules have changed for the 2026–2027 award year. These changes may affect Federal Pell Grant eligibility, federal student loans, Parent PLUS Loans, and student loan repayment.
Lamar State College Orange is committed to helping students and families understand these changes and how they may affect paying for college.
What is Changing?
Change |
What You Need to Know |
| Federal Loans & Part-Time Enrollment | Students enrolled less than full time may have their annual federal student loan eligibility reduced based on the number of credit hours they take. Students must still be enrolled at least half time to receive a federal Direct Loan. |
| Pell Grant Eligibility | New federal eligibility rules apply. For 2026–2027, students with a Student Aid Index (SAI) of $14,790 or higher generally will not qualify for a Pell Grant. |
| Parent PLUS Loans | New limits apply to certain Parent PLUS borrowers: $20,000 per year per dependent student and $65,000 total per dependent student. |
| Federal Loan Repayment | New repayment options are available for certain federal student loans. The options available to you depend on the types of loans you have and when you borrowed them. |
| Scholarships & Pell Grants | Receiving a scholarship does not automatically make you ineligible for a Pell Grant. However, Pell eligibility may be affected if your non-federal grants and scholarships equal or exceed your total Cost of Attendance. |
| Foreign Earned Income | Certain foreign earned income that previously may have been excluded will now be considered when determining Pell Grant eligibility. |
Taking Fewer Than 12 Credit Hours?
This is an important change for students who use federal student loans.
Beginning with the 2026–2027 award year, your annual federal student loan eligibility may be reduced if you are enrolled less than full time.
Example:
If full-time enrollment for the academic year is 24 credit hours and you enroll in 9 total credit hours, your annual loan limit may be reduced proportionally based on your enrollment.
You must still be enrolled at least half time during a semester to receive a federal Direct Loan.
Before dropping a class or changing your schedule, contact the LSCO Financial Aid Office to find out how the change could affect your financial aid.
What Should You Do?
Complete the FAFSA
Don't assume you won't qualify for financial aid because the rules have changed.
Consider Your Credit Hours
If you use federal student loans, the number of credit hours you take may now affect the amount you can borrow.
Ask Before You Drop
Dropping or withdrawing from a course can affect your financial aid. Contact Financial Aid before changing your schedule whenever possible.
We're Here to Help
Financial aid rules can be complicated, and these changes may affect each student differently.
You don't have to figure it out on your own.
Contact the LSCO Financial Aid Office with questions about:
- Your financial aid eligibility
- Pell Grants
- Federal student loans
- Parent PLUS Loans
- How your credit hours may affect your aid
- Changing or dropping classes
Frequently Asked Questions:
Possibly. Different types of financial aid have different enrollment requirements. Beginning in 2026–2027, however, the amount you can borrow through federal student loans may be reduced if you attend less than full time.
Undergraduate students generally must be enrolled at least half time to receive a federal Direct Loan.
The answer depends on when you make the schedule change and whether your financial aid has already been disbursed.
Contact the LSCO Financial Aid Office before dropping or withdrawing from a course whenever possible.
Your federal student loan eligibility may be affected because you will attend only part of the academic year. Contact Financial Aid so we can help determine the amount for which you may be eligible.
Your loan eligibility may be different because you did not attend during the fall semester. Financial Aid can help determine the amount available to you for the remainder of the academic year.
Not necessarily. Receiving a scholarship does not automatically make you ineligible for Pell. However, beginning in 2026–2027, Pell eligibility may be affected if your non-federal grants and scholarships equal or exceed your Cost of Attendance.
Yes. However, new borrowing limits apply to certain Parent PLUS borrowers beginning July 1, 2026. The new limits are:
$20,000 per year per dependent student
$65,000 total per dependent student
Some borrowers may qualify for an exception from the new limits based on when the student began the program and when federal loans were previously borrowed for that program. Contact Financial Aid if you are unsure whether the new limits apply to you.
Yes. New federal repayment options became available July 1, 2026, including the Tiered Standard Repayment Plan and the Repayment Assistance Plan (RAP).
The repayment options available to you depend on your loans and when they were borrowed. Visit StudentAid.gov for current repayment information.
Federal financial aid regulations and guidance are subject to change. LSCO will update this page as additional information becomes available from the U.S. Department of Education.