Loan changes effective 2026-2027 academic year

Paying for College
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This document outlines loan changes, including new limits on student & parent loans, as well as the elimination of Grad Plus loans. https://www.nasfaa.org/uploads/documents/OB3_Loan_Changes_Brief.pdf

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Thanks for posting this summary.

IMO, this specific statement is a good thing:

“Students and parents can no longer rely on federal funding to cover the full cost of attendance (direct institutional costs and living expenses).”

For people using loans (whether federal or not) to cover full COA, they need to find a more affordable option. I know for some there might not be a more affordable option, whether we are talking undergrad or grad/professional school.

In the big picture, this change will likely lead to more students taking non-federal loans. Often, when there are more potential customers in a given market, the resultant competition for them can bring innovation.

So maybe in this market (on the private loan side) we will see lower interest rates and/or innovation in the space either thru loan qualification, loan terms and/or even repayment plans. Maybe more schools will get into the loan business (plenty already are.) Of course there will be some bad actors too, so buyer beware. Personally, I already see the loan companies that offer loan interest rates in the mid-teens as bad actors.

If this federal change cuts back on how many loans students and/or parents were taking out, that’s generally a good thing. Even if that means fewer degrees, whether undergrad or grad/professional.

Time will tell the impact of the feds limiting loan access.

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I think it’s a load of crock they approval Chiropractors as ‘professional’ but not Physical Therapists -who in my mind, have much better training and outcomes. Also this eliminates graduate Nursing programs in a time of medical provider shortages. It also leaves out small, niche professional fields like Prosthetics. I had a student just graduate in that field - he makes prosthetics for amputees -there aren’t that many people trained in this field and the grad school is not cheap.

ETA: Before I get yelled at - nothing wrong with Chiropractors -they help a lot of people. But if they are allowed funding, PT should be as well.

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Would private lenders set interest rates based on the risk level they see, without the governmental motivation of “even if some default, those who graduate will earn more money, boost the economy, and pay more taxes”? Seems like the higher risk students would be offered interest rates higher than the mid-teens, if they are offered loans at all.

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I’m not in that business so I can’t answer your questions. I do know that Ascent Funding, a CC partner, offers non-cosigned loans for undergrads with interest rates in the teens.