As of July 1, schools can establish lower annual loan limits for specific programs, beginning with the 2026-27 award year.
In a June 26 Electronic Announcement, the Department of Education announced that the Working Families Tax Cuts Act (the Act) allows schools to set lower annual loan limits for specific programs, provided this limit is applied consistently to all students enrolled in the program of study. This provision is effective July 1, 2026.
In the announcement the Department said that schools have been asking for this flexibility for decades as a way to help prevent students from overborrowing, make loan repayment more affordable, and reduce delinquency and default.
The announcement includes examples of some best practices that schools can consider when setting lower annual loan limits.
The Department said it is committed to working with schools and the financial aid community to maximize the new benefits available through this Act as a way to help borrowers limit unnecessary borrowing and ensure that they successfully manage their student loan debt once they graduate.
