These changes to Federal Aid begin on July 1, 2026, and are subject to change as more guidance becomes available from the U.S. Department of Education.
The One Big Beautiful Bill Act (OB3) What you need to know
Impact to Financial Aid: Undergraduate Students
New Students
For new students (who have never previously attended college OR borrowed federal loan funding):
- Undergraduate student loan limits are unchanged from previous years
- Undergraduate dependent students whose parents are interested in borrowing a federal Parent PLUS Loan (application process HERE) have an annual limit up to $20,000 per dependent student and a total aggregate (borrowing) limit of $65,000.
- Undergraduate students who are less than full-time (6 - 11 credit hours enrolled): federal loan eligibility will now be calculated by the enrollment percentage of full-time credit hours (defined as total hours / 12 = percent of annual loan limit, by term).
Example: Student A is enrolled in seven (7) credit hours as a freshman: 7 / 12 = 58 percent. $2750 x 58% = $1595 of federal loan eligibility for the Fall 2026 term. - Undergraduate students enrolled in less than 6 credit hours are not eligible for Federal Direct Student Loans.
Continuing Students
For continuing (or "legacy") undergraduate students who have previously borrowed federal loan funding:
- Undergraduate full-time students (12 credit hours or more, per term): loan limits are unchanged and still require a completed FAFSA annually.
- Undergraduate students who are less than full-time (6 - 11 credit hours enrolled): their federal loan eligibility will now be calculated by the enrollment percentage of full-time credit hours (defined as total hours / 12 = percent of annual loan limit, by term).
Example: Student A is enrolled in seven (7) credit hours as a freshman: 7 / 12 = 58 percent. $2750 x 58% = $1595 of federal loan eligibility for the Fall 2026 term. - Undergraduate students enrolled in less than 6 credit hours are not eligible for Federal Direct Student Loans.
For undergraduate dependent students whose parents wish to pursue a Parent PLUS Loan
- The PLUS loan for legacy students will be available for up to three years starting July 1, 2026, OR until the student earns their degree, whichever comes sooner.
Helpful Definitions to Navigate OB3
"Legacy" Students: Legacy students are defined as current students, within the same academic program who have borrowed any federal student loan, within that program, prior to July 1, 2026.
"New" Students: New students are defined as follows:
- Never previously borrowed a federal student loan prior to July 1, 2026, or
- Beginning enrollment at UK into a new program of study, without borrowing a federal student loan within that program while at UK prior to July 1, 2026, or
- Transferring to UK from another institution and will borrow their federal student loans (and have them disbursed) after July 1, 2026.
Impact to Financial Aid: Graduate Students
These changes to Federal Aid begin on July 1, 2026, and are subject to change as guidance is received by the U.S. Department of Education.
New Graduate Students
For new students enrolled in a graduate program who have not previously borrowed federal funding towards this program:
- Unsubsidized Federal Loan annual limit of $20,500 is unchanged from previous years.
- Students' total aggregate (borrowing) loan limit toward their new program is $100,000 (not inclusive of their undergraduate loan borrowing or any previously paid loan balances)
- Graduate PLUS loans are not available to new students or students who have not previously borrowed a federal loan within their current program, prior to July 1, 2026.
Continuing Graduate Students
For continuing (or "legacy") graduate students who have previously borrowed federal loan funding:
- Full-time graduate students enrolled in their college/program (confirm with your advisor or program): Unsubsidized Federal Loan limit annually - $20,500 - is unchanged from previous years.
- Less-than-full-time graduate students: federal loan eligibility calculated using the formula below:
Example: Student B is a graduate student enrolled in five (5) credit hours (and their program considers 9 credit hours to be full-time): 5 hours / 9 hours - FT status = 55.5 percent
Student B is eligible for 55.5% of their annual loan limit, for the term, which is $10,250 x .56 = $5,740
Graduate PLUS Loans
Graduate students who are considered legacy students may continue to apply for and obtain a Graduate PLUS loan. The provision for legacy students has a time limit of three (3) academic years or the completion of their program, whichever comes first.
Impact to Financial Aid: Professional Students (as defined by the OB3 Act)
There are a number of recognized professional programs at the University of Kentucky. The One Big Beautiful Bill Act defines professional programs based on the Classification of Instructional Program (CIP) code used by the U.S. Department of Education. The CIP code indicates which programs, for federal aid purposes, are considered to be professional programs of study.
All institutions are required to utilize this definition when identifying a student's federal loan eligibility.
New Professional Students
New professional students or students who have not previously borrowed a federal student loan prior to July 1, 2026:
- Unsubsidized student loan limit of $50,000 annually and $200,000 as an aggregate limit.
- Graduate PLUS loans are no longer available for new borrowers as of July 1, 2026
Continuing Professional Students
Continuing or "legacy" professional students who have previously borrowed federal loan funding in their current program:
- Unsubsidized student loan limit of $20,500 annually and applicable health professions loan eligibility.
- Professional legacy students may continue to apply for and obtain a Graduate PLUS loan. The provision for legacy students exists with a time limit of three (3) academic years or the completion of their program, whichever comes first.