American University is committed to helping undergraduate students meet college costs through need- based grants, scholarships that do not need to be repaid, and Federal Work-Study opportunities. While many students may not need to borrow, some families choose to use federal student loans as part of their financing plan.

Under the new federal law, annual and aggregate loan limits for undergraduate students remain unchanged. However, all undergraduate borrowing will now count toward a new lifetime federal loan limit.

• Annual loan limits:
  $5,500–$12,500 per year, depending on year in school and dependency status
• Aggregate loan limits:
  $31,000–$57,500 total, depending on dependency status
• New lifetime federal loan limit:
  $257,500 total, including undergraduate, graduate, and professional study, regardless of amounts repaid, forgiven, canceled, or discharged.

Yes. Beginning with the 2026–27 academic year, students will not be eligible for a Pell Grant if their Student Aid Index (SAI) exceeds twice the maximum Pell Grant amount for that year. While Pell Grant awards will still vary based on income and family size, eligibility will now include a firm cutoff tied to the annual maximum award.

Additional guidance from the U.S. Department of Education is available in the APP-25-23: 2026–27 FAFSA Form and Pell Grant Eligibility Updates.

No. The new law does not change Federal Work-Study eligibility. Work-Study will continue to be awarded based on financial need as determined by the FAFSA and institutional awarding policies. Schools will continue to determine funding availability and individual awards.

No. Undergraduate students may only receive additional unsubsidized loan funds if a parent is unable to borrow a Parent PLUS Loan due to exceptional circumstances, such as an adverse credit history. Reaching the Parent PLUS aggregate borrowing limit is not considered an exceptional circumstance.

No. Federal loan and aid changes do not affect institutional scholarships, which are awarded and renewed according to university policies.

Federal loan limits for undergraduate students have not changed, but all borrowing will now count toward a new lifetime federal loan limit.

• Annual student loan limit:
  $5,500–$12,500 (based on year in school and dependency status)
• Aggregate student loan limit:
  $31,000–$57,500 (based on dependency status)
• Lifetime federal loan limit:
  $257,500 total, including undergraduate, graduate, and professional borrowing, regardless of repayment or forgiveness.

Yes. Beginning in 2026–27, students are not eligible for a Pell Grant if their Student Aid Index (SAI) exceeds twice the maximum Pell Grant amount for that year. Pell Grant awards will still vary based on income and family size.

No. Federal Work-Study eligibility is unchanged and continues to be based on financial need and institutional awarding policies.

Yes. Beginning in the 2026–27 academic year, new limits apply:

• Annual limit: $20,000 per student
• Lifetime limit: $65,000 per student

Parents with existing Parent PLUS Loans may continue borrowing under the previous limits for the remainder of the student’s current program or up to three additional years, whichever is shorter, as long as the student remains continuously enrolled.

If the student takes a leave of absence or does not complete a term, the parent will be considered a new borrower and subject to the new limits.

No. Undergraduate students may only borrow additional unsubsidized loan funds if a parent is denied a Parent PLUS Loan due to exceptional circumstances, such as adverse credit. Reaching the borrowing limit does not qualify.

Grad PLUS Loans are being phased out.

• Students who are new borrowers will not be eligible for Grad PLUS for terms beginning July 1, 2026, or later.
• Students who borrowed before July 1, 2026, who meet the legacy requirements for an interim exception, may continue borrowing only if they remain continuously enrolled in the same program.

Beginning in 2026-2027, all new students and continuing students who do not meet the legacy requirements for an interim exception will be subject to the new loan limits listed below.

• Graduate students: $20,500 per year
• Professional students: $50,000 per year

Unsubsidized Direct Loan Limits:

• $100,000 for graduate borrowing
• $200,000 for professional borrowing
  (Undergraduate loans are not included in these caps.)
• $257,500 for all total federal student loans borrowed including graduate PLUS loans

AU has two professional programs—JD Law and Clinical Psychology PhD. All other programs at AU are considered graduate level rather than professional level programs.

Students may want to explore:

• Institutional scholarships, fellowships, and assistantships
• Private education loans
• Employer-sponsored or public service education benefits
• Monthly payment plans
• External scholarships and fellowships

Students are encouraged to contact Financial Aid early to discuss options.

Current students might be able to continue to receive the Federal Direct Graduate PLUS if they meet the following legacy criteria:

• Began enrollment in their current program prior to July 1, 2026. If you are a summer 2026 admit, your first summer courses must begin prior to July 1, 2026.
• Currently enrolled as of June 30, 2026. This means that you were enrolled for the spring 2026 semester or are enrolled for summer 2026 term in a course that begins prior to July 1, 2026. If you took the spring semester off, you will need to enroll in a summer course to re-establish yourself as currently enrolled. For a limited number of programs that require summer enrollment, a student must be enrolled in a summer course that begins prior to July 1, 2026, in order to be considered currently enrolled.
• Remain enrolled in the same program at the same school. Two programs are considered the same program if the first 4 digits of the CIP Code are the same. Otherwise, when you change programs, you are no longer meeting the legacy provisions and are subject to the new rules from that point forward.
• Have a Federal Direct Loan paid for the same program prior to July 1, 2026.
• Remain continuously enrolled after July 1, 2026. For most programs, this requires that a student be enrolled every fall and spring semester. For a limited number of programs that require summer enrollment, students must be enrolled every term including summer. If you take a semester off, you will no longer be meeting the legacy requirements and are subject to the new rules from that point forward.
• Only considered a legacy student for the remainder of the program length or 3 years, whichever is less. Most Masters programs have a program length of 2 years. If you already attended 1 year, then you only have 1 year remaining during which you can potentially receive the PLUS loan under the legacy interim exception. If you have not graduated by that point, you may still be able to borrow the Federal Direct Unsubsidized Loan under the new loan limits, but the Graduate PLUS loan will no longer be available from that point forward.

Beginning with the fall 2026 semester, all federal student loans must be prorated if a student is enrolled less than full time. For example, full time enrollment for the fall term for main campus graduate programs requires enrollment in at least 9 credits. If you are enrolled in 9 credits, the maximum unsubsidized loan you can receive for that term is $10,250 (half of the annual limit $20,500). If you are only enrolled in 6 credits, then this will be prorated to $6,833 for that term.

Yes. If you received a federal Direct loan prior to July 1, 2026, AND you do not receive any new federal loans (including consolidation loans) on or after July 1, 2026, then you can continue to select one of the old payment plans for a limited period of time. Once any new loan is paid on or after July 1, 2026, then you will be required to use one of the new repayment plans. You should consult with your lender and loan servicer for further information as you review your payment plan options. Refer to https://studentaid.gov for additional information.