Loans

Family farms, family-owned small businesses, and family-owned fisheries are excluded as assets when determining federal financial aid eligibility if they employ fewer than 100 people.

• Your annual federal loan amount may be reduced if you are not enrolled full time or if you withdraw from or drop classes.
• No more than 50% of your annual loan eligibility may be disbursed in a single term.
• A new lifetime loan limit applies. Once you reach that limit, you may not borrow additional Federal Direct Loans, even if previous loans were paid off or discharged.
• Students who borrowed before July 1, 2026, may qualify for a limited exception from the new loan limits for up to three academic years.

• Beginning July 1, 2026, two repayment options will be available for new loans: the Tiered Standard Plan and the Repayment Assistance Plan (RAP).
• Beginning July 1, 2027, defaulted loans may be rehabilitated twice instead of once.
• Beginning July 1, 2027, general forbearance will be limited to 9 months instead of 12 months.
• Beginning July 1, 2027, economic hardship and unemployment deferments will no longer be available for new deferment requests.
• Changes are also coming to certain loan forgiveness provisions.

Federal Direct Loan Program

Federal Direct Loan Schedule of Reduction (SOR)

Direct Loans are reduced for less-than-full-time enrollment.

1. The OBBBA requires CUNY School of Law to adjust annual Federal Direct Loan amounts based on the percentage of full-time status in which a student is enrolled.
2. Students who are enrolled less than half time, as defined by their academic program type, are not eligible for a Federal Direct Loan disbursement.

If you are enrolled less than full time for your academic program, your annual Federal Direct Loan amount will be reduced based on the percentage of full-time enrollment you are completing.

This means:

• Federal loans are treated as annual loans tied to enrollment for the full academic year.
• No more than 50% of your annual loan eligibility may be disbursed in a single term.
• If your enrollment changes mid-year, such as withdrawing or enrolling less than full time in the second semester, remaining loan disbursements must be adjusted in the following semester to reflect your updated academic-year enrollment.
• Students who are enrolled less than full time for the combined Fall/Spring academic year will have their loans adjusted in the second semester.

All Federal Direct Loans are subject to this reduction requirement.

• 12 credits per semester or 24 credits per year
• If a required summer semester applies: 12 credits per semester or 36 credits per year
• You must be enrolled in at least 6 credits during any semester in which you intend to request and receive federal loans.

Annual loan limit: The maximum loan amount you may borrow each academic year.

Aggregate loan limit: The maximum amount of subsidized and unsubsidized loan principal that may be outstanding at any point in time for undergraduate, graduate, or professional study.

Lifetime limit: A new $257,500 lifetime Federal Direct student loan limit for all levels of study for new borrowers, beginning with the Summer 2026 semester. This limit excludes Parent PLUS and consolidation loans, although the underlying loans included in a consolidation loan are counted.

The lifetime limit counts even if loans were previously paid off or discharged. It also includes Graduate PLUS borrowing and subsidized loans borrowed before 2010.

Students who are eligible for the limited exception may continue to borrow under the pre-OBBBA limits if all of the following conditions are met:

1. The student borrowed a Federal Direct Loan before the Summer 2026 semester.
2. The exception remains valid for up to three academic years or until degree completion, based on the published scheduled length of the program, whichever comes first.
3. The student remains continuously enrolled at CUNY School of Law in the same program for Fall/Spring in at least 6 credits per semester.
4. Taking a semester off ends eligibility for this exception. This includes a total withdrawal in a Fall or Spring semester and/or taking a semester off without a leave of absence.

No. Students who are eligible for the exception must follow the pre-OBBBA limits and PLUS loan eligibility criteria unless and until the exception criteria no longer apply.

Certain repayment plans, including IBR, PAYE, and SAVE, are being phased out and will transition either to a Tiered Standard Plan or to the Repayment Assistance Plan (RAP). Learn more on the Federal Student Aid OBBBA updates page under the “Common Questions and Answers” section.

Learn more about the Tiered Standard Plan and RAP on the Federal Student Aid definitions page.

Changes are coming to Public Service Loan Forgiveness (PSLF), depending on when a borrower first borrowed. Learn more on the Federal Student Aid OBBBA updates page under the “Public Service Loan Forgiveness (PSLF) Borrower Scenarios” section.

Note: Payments made while enrolled in the Tiered Standard Plan are not qualifying payments for PSLF or Temporary Expanded Public Service Loan Forgiveness (TEPSLF).

Effective July 1, 2027, borrowers may rehabilitate a defaulted loan twice instead of once. The minimum rehabilitation payment for Direct Loans changes to $10.

An attempt to rehabilitate a loan that does not return the loan to good standing does not count against the two lifetime rehabilitation attempts. Participation in the Fresh Start program also does not count against the two lifetime attempts.

Effective July 1, 2027, general forbearance will be limited to 9 months instead of 12 months.

Effective July 1, 2027, economic hardship and unemployment deferments will no longer be available for new deferment requests.

Yes. If you withdraw from or drop courses and your enrollment falls below full time, a future loan disbursement may be reduced.

For Fall/Spring enrollment, full time is 12 credits per semester or 24 credits per year, not including Summer enrollment. If required Summer enrollment applies, full time is 12 credits per semester or 36 credits per year.

For new borrowers as of July 1, 2026, CUNY Law graduate/professional students may borrow up to $50,000 annually through the Federal Direct Unsubsidized Loan Program.

For new borrowers as of July 1, 2026, CUNY Law graduate/professional students have a new aggregate limit of $200,000.

Students who meet the limited exception for the duration of the exception period remain subject to the prior aggregate limit of $138,500.

The Graduate PLUS Loan is eliminated for new borrowers and for students who were not continuously enrolled in the same program at CUNY Law as of July 1, 2026.

See “What is the Limited Exception for Graduate Loans?” below for information about who may still qualify for this loan program.

Students are not subject to the new loan limits for up to three academic years or the remainder of their expected time to credential, whichever is less, if both of the following apply:

1. They remain continuously enrolled in the same program of study at CUNY School of Law.
2. They received a Direct Loan for that program of study before July 1, 2026.

Students eligible for the limited exception are subject to the $138,500 aggregate maximum and may receive a Graduate PLUS Loan for up to three academic years or the remainder of their expected time to credential, whichever is less. These students are still subject to the Schedule of Reduction.

Because the annual Graduate PLUS amount is based on cost of attendance minus other financial aid, Graduate PLUS loan eligibility under the Schedule of Reduction will vary by student.

Learn more about the limited exception on the Federal Student Aid OBBBA updates page.

It depends. If you are continuously enrolled at least half time in the same graduate/professional program, you may be eligible for the limited exception rules.

If you have exceeded more than three years of the established program length, you would not be eligible for the exception.

If this is a new master’s degree or new advanced certificate program, you would not be eligible for the limited exception. The new borrowing limits and Graduate PLUS Loan ineligibility would apply.

Yes. Loans borrowed through the Graduate PLUS Program are included in the new lifetime limit. If you have Graduate PLUS Loan borrowing from prior years and are not eligible for the limited exception, you may no longer be able to borrow from any Federal Direct Loan program if your total borrowing exceeds the new lifetime limit.

This may not apply to students who qualify for the limited exception and remain under pre-OBBBA loan rules.

We are here to assist with questions about these changes. Please email us at financialaidoffice@law.cuny.edu.

Please include your name, EMPLID, and the nature of your question so we can assist you.