7 things to know about coming federal financial-aid changes

Programs at Metropolitan State University of Denver are designed with affordability in mind, structured to align with federal borrowing limits while delivering strong career outcomes. As new caps and rules go into effect July 1, that approach could matter more than ever. Here’s what students should know, according to experts in the Office of Financial Aid and Scholarships at MSU Denver.

1. MSU Denver programs are built with affordability in mind.

All of MSU Denver’s programs are intentionally designed to:

• Align with federal borrowing limits
• Provide strong return on investment
• Remain accessible to working students

As borrowing becomes more structured, choosing a program designed with cost in mind becomes a real advantage.

2. Your loan amount may depend on how many credits you take.

Your class schedule is not just academic. It directly affects your financial aid. Under the new law, institutions must prorate federal loan amounts based on a student’s enrollment level, which could reduce how much they can borrow.

Full-time enrollment (12 credit hours) may allow maximum borrowing, while part-time students may see lower loan eligibility.

3. “New” vs. “current” borrower status will shape your options.

The law introduces a distinction between new and current borrowers, which determines which rules and loan limits apply.

“This distinction is important because it changes the rules on how much students are eligible to borrow on a yearly and lifetime basis, what type of loans are available and the repayment plans that will be available to enroll in once students enter repayment on the loans,” said Jennifer Helgeson, director of compliance in the Office of Financial Aid and Scholarships. “Students should understand how their borrower status could shape their options moving forward.”

RELATED: Colorado students leave $30 million in financial aid unclaimed

4. Graduate borrowing is expected to become more limited.

Graduate students are likely to see some of the most significant changes under the new law. Graduate PLUS loans will no longer be an option for new borrowers after July 1.

Other changes to graduate borrowing include:

• New or tighter limits on how much students can borrow through federal loans on a yearly and lifetime basis
• Elimination of the Grad PLUS option for new borrowers after July 1 and a reduction of unsubsidized loan offers if a student is not enrolled full time for the academic year
• Less flexibility in repayment options compared with the current system

The law also creates a $100,000 aggregate borrowing cap for many graduate students, replacing the current structure that allows higher combined borrowing limits.

For many students, federal loans have traditionally covered most, if not all, of the cost of a graduate degree. That may no longer be the case at some institutions. Students may need to look more closely at total program cost, time to completion and how much they plan to borrow over the duration of their study.

“We’re encouraging students to think about the full cost of their program from the start,” said Michael Nguyen, executive director of Financial Aid and Scholarships and Enrollment Call Center. “Understanding how borrowing limits may change can help students make more informed decisions.”

Learn more about the cost of graduate programs at MSU Denver.

5. Enrollment changes can impact your aid.

Dropping a class, changing majors or taking time off can affect:

• The loan amount you are eligible to receive for the academic year
• Your borrower classification
• Your remaining borrowing capacity

MSU Denver experts recommend talking to academic and financial aid advisors before making changes.

Under current rules, some students enrolled part time can still access their full annual loan amount. Beginning in 2026, that same student could see eligibility reduced by several thousand dollars based on enrollment intensity alone.

“Even small changes to enrollment can have ripple effects,” Helgeson said. “These changes are really about how aid is calculated behind the scenes, and students may not see it directly, but it can significantly affect how much they’re eligible to receive.”

6. Parent and alternative loans may play a larger role.

Federal financial aid will still be the foundation for most students, but it might not cover the full cost of attendance under the new system.

As borrowing limits and calculations shift:

• Parent PLUS loans will remain an option, though new rules will limit the amount a parent may borrow each year and the total amount the parent is eligible to borrow over the span of a student’s undergraduate program
• Some students may need to explore private or alternative loans to help cover remaining costs

For families who have relied primarily on federal aid in the past, this could represent a shift in how college is financed. Under the new law, Parent PLUS borrowing will be capped at $20,000 annually per student, with a $65,000 lifetime limit.

In addition, Parent PLUS loan repayment plans have been limited to one option, a tiered standard repayment plan, if a PLUS loan is borrowed after July 1. This will be the only repayment option available for all PLUS loans borrowed before July 1 if the parent continues to borrow PLUS loans after July 1. If a parent is enrolled in the Public Service Loan Forgiveness plan (PSLF) and borrows a PLUS loan after July 1, the parent will be removed from the PSLF plan, even if they have already made qualifying payments, and put into the tiered standard repayment plan.

What to consider: Understanding the differences between federal and private loans, including interest rates, repayment options and protections, will be more important than ever.

“We want students and families to be aware of all available resources,” Nguyen said. “Federal aid remains the starting point, but planning ahead and understanding your options will be key.”

7. These changes start in 2026, and guidance is still evolving.

The new rules take effect July 1, and most students will be impacted beginning in fall 2026.

MSU Denver notes that:

• We are still awaiting Department of Education guidance
• Some details may change as the Department of Education continues to publish guidance on the new federal rules in the upcoming months

The takeaway: You have time to prepare but staying informed matters.

Start planning now. Review the latest updates and talk with a financial aid advisor about how these changes could impact your path. These changes are not just about financial aid. They are about how students plan their education. As borrowing becomes more structured, choosing a program that is both high-quality and financially realistic will matter more than ever.