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OB3 Loan Changes
One Big Beautiful Bill changes to Federal Direct Student Loans
The following updates pertain to federal student loan policies as a result of the One Big Beautiful Bill (OBBB) signed into law July 2025 and effective beginning the 2026-27 award year. Please read the updates below then follow the steps to complete the 2026-27 Federal Direct Loan Request form. DC3 is a “header” college so these rules begin in the Summer of 2026. These changes apply nationally and are not specific to Dodge City Community College.
Changes to Federal Loan Availability and Annual Limits
Before July 1, 2026, students could continue borrowing federal student loans for as long as they remained enrolled in an eligible program. Beginning July 1, 2026, loan eligibility is tied to the published length of the academic program, rather than the amount of time a student takes to complete it. Federal student loan eligibility and limits have changed under the One Big Beautiful Bill (OBBB). The OBBB reduces the amount of federal loan(s) a student may borrow for an award year, should the student be enrolled in a program of study on a less than full-time basis during that award year.
For federal student loan purposes, full-time enrollment is defined as 24 or more credit hours/award year.
Students enrolled in fewer than 24 total credit hours during the academic year will see a reduction in their federal loan eligibility.
Enrollment Changes and Required Loan Adjustments
Under these new federal regulations, student loan awards may be adjusted at any time due to changes in enrollment. This includes, but is not limited to:
- Changes in credit hours from the time the loan was originally calculated
- Withdrawing from one or more courses during a semester in which loan funds were disbursed
Withdrawing from course(s) may result in:
- A balance owed by the student for the affected term, and/or
- A reduced loan amount for a subsequent term within the same award year
These loan adjustments are required under federal law, even if a loan disbursement or refund has already been processed.
Parent PLUS Loan Annual and Aggregate Limits
The Federal Parent PLUS loans is now capped at a maximum of $20,000 per student per academic year, with a lifetime aggregate limit of $65,000 per student. These limits apply to all parents combined per dependent undergraduate student beginning in the 2026-2027 academic year.
What Did Not Change
While some aspects of federal loan eligibility are changing, several important programs will continue.
- Federal Direct Loans will remain available to eligible students.
- Legacy Parent PLUS Borrowing can continue under prior borrowing limits tied to the cost of attendance minus other financial aid provided the student or parent borrower has:
- Borrowed a federal direct loan before July 1, 2026 while the dependent student was enrolled
- All legacy provisions are limited to the shorter of:
- The remaining length of the program, or
- Three additional years.
For many students — particularly those enrolled full time — there may be little or no immediate impact.
What Students Should Know
DC3 will continue to provide students with an anticipated full-time loan amount as part of the financial aid process based on expected enrollment, unless a student is already enrolled on a part-time basis.
- Final loan eligibility is confirmed after course registration and review of cost of attendance.
- For some students, loan eligibility may look different than in prior years.
- For others, eligibility may remain largely the same.
Detailed and individualized information will be shared when DC3 receives the final regulation from the US Department of Education.
2026 – 2027 Loan Schedule of Reductions (SOR):
Beginning in the 2026-2027 academic year, Direct Loans must be proportionally reduced for students enrolled on a less-than-full-time (LTFT) basis. The SOR applies to all students. SOR does NOT apply to Parent PLUS loans. The reduction is calculated using the above equation. Financial aid offices must evaluate enrollment at the time of each disbursement. Students enrolled in a single semester cannot receive more than ½ of their full-time annual loan limit.
See Chart below for calculation:
| Credit hours for Academic Year | Number of Credits considered Full Time for academic year | % of Eligible Loan limit* |
|---|---|---|
| 24 | 24 | 100% |
| 23 | 24 | 96% |
| 22 | 24 | 92% |
| 21 | 24 | 88% |
| 20 | 24 | 83% |
| 19 | 24 | 79% |
| 18 | 24 | 75% |
| 17 | 24 | 71% |
| 16 | 24 | 67% |
| 15 | 24 | 63% |
| 14 | 24 | 58% |
| 13 | 24 | 54% |
| 12 | 24 | 50% |
| 11 | 24 | 46% |
| 10 | 24 | 42% |
| 09 | 24 | 38% |
| 08 | 24 | 33% |
| 07 | 24 | 29% |
| 06 | 24 | 25% |
* Annual loan limits may be affected by Withdrawal and Dropping course after disbursement.
Waiting Further guidance regarding loan proration from the Department of Education.
FAQ: Summer Loans and Annual Loan Limits
Subject to change based on final federal regulations.
Starting in the 2026–2027 award year, your annual loan limit may be reduced proportionally if you are enrolled less than full-time (24 credits annually).
1. What are the changes at a glance?
| Loan Type | Change Level | OLD Rule (BEFORE July 1, 2026) | NEW Rule (AFTER July 1, 2026) |
|---|---|---|---|
| Loan eligibility duration | Major change | Students could borrow for as long as they remained enrolled in 6 or more units and met all other criteria. | Loan eligibility tied to program length. A two-year program gets two years of loans even if you have not completed your program. |
| Part-time loan amounts | Major change | A part-time student could borrow the same amount as a full-time student. | Loan amounts prorated based on unit load. Half-time students get roughly half the amount> |
| Undergraduate loans (subsidized and unsubsidized) | Little to no change | $5,500 to $7,500 per year depending on year in school. $31,000 lifetime cap for depended undergrads. | Annual and lifetime limits unchanged |
| Lifetime federal loan cap (all student borrowing combined) | New Rule | No single unified lifetime cap across all federal student loan types | $257,500 total across undergraduate, graduate, and professional loans combined. |
| Parent PLUS loans | Major Change | Parents could borrow up to the full cost of attendance minus other aid, every year. No annual cap. No lifetime cap. | $20,000 per year per child. $65,000 lifetime cap per child. Cap follows the student, not the school. |
2. What are the annual loan limits?
- Dependent Students:
- First Year: $5,500
- Second Year: $6,500
- Independent Students:
- First Year: $9,500
- Second Year: $10,500
3. What changed with loan repayments?
- Student loans disbursed on or after July 1, 2026 will only be eligible for two repayment plans: Tiered Standard and the Repayment Assistance Plan (RAP). Effective July 1, 2027, borrowers will be allowed to rehabilitate a defaulted loan twice. Loans made on or after July 1, 2027 will not qualify for unemployment or economic hardship deferments, and forbearance will be strictly limited to nine months within any two-year period.
4. What changed from last summer to this summer, and how much will I receive?
The primary change is how the annual loan limit is distributed.
Previously, DC3 divided the annual loan limit evenly across three semesters. Beginning this summer, students enrolled in at least 6-8 credits will be awarded up to 25% -33% of their annual loan limit for the summer term. The remaining 75%-67% will be split between the fall and spring semesters. BUT: this could change, too based on your enrollment and final Federal rulings!
- Estimated Summer Loan Amounts at 25%
- Dependent Students:
- First Year: $5,500 × 25% = $1,375
- Second Year: $6,500 × 25% = $1,650
- Independent Students:
- First Year: $9,500 × 25% = $2,375
- Second Year: $10,500 × 25% = $2,625
5. What if I am enrolled in 12 credits for fall and 12 credits for spring?
- Students enrolled in 12 or more credits (full-time) in a semester may be eligible for up to 50% of their annual loan limit for that term.
- If enrolled in 6 credits (half-time), eligibility would typically be up to 25% of the annual loan limit for that semester.
6. What happens if I drop a course?
- Your loan eligibility is directly tied to your enrollment level. If you drop below full-time or half-time status, your loan amount may be reduced or canceled accordingly.
7. If I am enrolled in 3 credits in the first half and 3 credits in the second half, when will my loan disburse?
- Loan funds will not be disbursed until the college confirms your attendance in the second half course.
8. What happens if I fail a course?
- Still awaiting guidance
9. Examples:
Fall/Spring Fulltime to start and drops:
Full-Time Status is 24 credits for the academic year (12 credits per semester)
A student who drops to 9 credits in the fall semester and maintains 12 credits for the spring semester will be 3 credits short of being considered full time for the academic year. Due to dropping the 3 credits the student federal loans must be reduced.
Fall/Spring Part-Time Fall and Spring:
Full-Time Status is 24 credits for the academic year (12 credits per semester)
A first-year student enrolled in 6 credits in the fall semester and enrolls in 6 credits in the spring semester will be enrolled in 12 credits, short of being considered full time for the academic year which is 24 credits.
The information on this page reflects Dodge City Community College’s current understanding of the changes within the One Big Beautiful Bill Act. This information is subject to change depending upon the U.S. Department of Education’s (ED) rulemaking process. This content may be updated as regulations are revised or as additional federal guidance becomes available.