Financing Your Education

The Chicago School is committed to providing transparent, timely information about recent federal legislation that may affect student financial aid in the future. The changes described below will take effect no earlier than July 1, 2026, and do not impact financial aid or borrowing eligibility for the current academic year.

What is the Negotiated Rulemaking process, and how is it relevant to recent legislation from July 2025?
Negotiated Rulemaking, often called “Neg Reg,” is the formal process the U.S. Department of Education uses to develop and finalize new regulations that interpret or implement federal education laws.

For the new legislation, this process is critical. While the law sets the broad rules (such as new loan limits and the sunsetting of Grad PLUS), many of the specific details, like how loan proration will be calculated or how loan limits will be applied,” must be defined through Neg Reg.

Here’s how the process works:

• Notice of Intent: The Department of Education announces it will begin rulemaking.
• Public Hearings: At least two hearings allow individuals and institutions to provide feedback.
• Committee Formation: A diverse group of stakeholders (schools, students, lenders, etc.) is selected.
• Negotiation Sessions: The committee meets over several months to discuss and agree on draft rules.
• Proposed Rules: If consensus is reached, the Department of Education publishes proposed regulations for public comment.
• Final Rule: The Department of Education reviews comments and issues a Final Rule by Nov 1, for implementation on July 1 the following year.

Understanding this process is important because it means that while the legislation is now law, many of its details are not yet final. We are committed to monitoring these developments closely and will continue to keep you informed with clear, timely updates, so you can plan confidently and focus on your education.

What is changing in federal student aid?
Federal legislation passed in July 2025 introduces updates to how students access federal financial aid. These changes affect federal loans, grants, and repayment structures for both undergraduate and graduate students. Most changes are scheduled to go into effect on July 1, 2026. Some provisions remain under federal review with the Negotiated Rulemaking process, and we will continue to monitor updates as they are released.

GRADUATE & PROFESSIONAL STUDENTS

What is happening to Graduate PLUS Loans?
As written in new legislation, Graduate PLUS Loans will no longer be available for new borrowers starting July 1, 2026.

• Students who receive a certified Grad PLUS Loan for their current program prior to July 1, 2026, will be grandfathered in and can continue borrowing through the 2028–2029 academic year or program completion, whichever comes first.

What are the new federal loan limits for graduate students?
The legislation has established a new lifetime cumulative borrowing cap of $257,500 in federal student loans. This total includes all federal loans borrowed program levels, undergraduate, graduate, and professional. Students may borrow up to the individual limits outlined below, but the combined total of all borrowing cannot exceed $257,500. Loan amounts are not transferable between program levels, and there is no provision for replenishment if a student transitions between levels or exhausts their eligibility.  
Individual borrowing caps by program level:

• Undergraduate total: $57,500
• Graduate (non-professional): $100,000
• Graduate (professional): $200,000

UNDERGRADUATE STUDENTS

Are Pell Grants changing?
Yes. New legislation includes several proposed updates to Pell Grant eligibility:

• Students become ineligible if their total aid (federal, state, institutional, or private) exceeds their cost of attendance.
• Students with a Student Aid Index (SAI) greater than twice the maximum Pell Grant amount will not qualify.
• Foreign income will be counted toward a student’s Adjusted Gross Income (AGI), which could affect eligibility.

What is changing with Parent PLUS Loans?
Beginning July 1, 2026, Parent PLUS Loans will be capped at:

• $20,000 per dependent undergraduate student, per year
• $65,000 lifetime maximum per dependent student

These limits apply to all parent borrowers combined (not per parent).

Are Work-Study and SEOG going away?
There is no impact to the Federal Work Study program or SEOG related to the new legislation.

WHAT THIS MEANS FOR YOU

Are repayment options changing?
New federal legislation is restructuring repayment options for all borrowers. As of July 1, 2026, new borrowers will no longer be eligible for Income-Contingent Repayment (ICR) plans. By July 1, 2028, all borrowers must transition to one of two approved plans:

• Standard Repayment Plan (SRP): Fixed monthly payments based on total loan balance, with repayment terms of 10 to 25 years.
• Repayment Assistance Plan (RAP): Income-based payments starting at $10/month, with eligibility for Public Service Loan Forgiveness (PSLF). Annual recertification will be required, with details to be provided by the U.S. Department of Education.

Borrowers currently using other repayment plans may continue until July 2028, at which point they will need to switch to SRP or RAP.

Do these legislative changes affect my current financial aid?
No. These changes will not affect your current financial aid for the 2025–2026 academic year.

Which academic programs are affected by the new federal loan limits—and how is “professional” defined?
The new federal legislation introduces separate lifetime loan limits for undergraduate, graduate, and professional programs. While undergraduate and graduate categories are generally well defined, the classification of “professional” programs is still under federal review.

At this time, there is no final or comprehensive list of which programs will be classified as “professional” under the new guidelines. The U.S. Department of Education is expected to provide further clarification through the negotiated rulemaking process. Until that process concludes, institutions are unable to confirm whether specific programs will fall under the “graduate” or “professional” borrowing cap.

Should I do anything now?
There is no action needed at this time. We will continue to monitor federal guidance and share updates as more details are finalized.

In the meantime, students considering graduate or professional study may benefit from beginning their programs under the current aid structure before these changes take effect on July 1, 2026.

Who can I talk to with questions?
We know these updates may raise questions, and we’re committed to keeping our community informed as federal guidance is finalized. While many policy details are still under review, we will continue to update this page and share information through webinars and other outreach as soon as it becomes available.