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Federal Loan changes

Background information about US Federal Loan changes

The One Big Beautiful Bill Act came into effect through the US Department of Education (USDE) on 1 July 2026, introducing significant changes to the federal student aid programme. This page provides an overview of these changes.

Higher education institutions participating in the US Federal Loan Programme are currently awaiting the release of official regulations. Until these are published, the information below is based on the limited guidance provided by the Department of Education and reflects UAL's understanding at the time of publication. Information on this page may be updated as further information becomes available.

As additional regulations and guidance are confirmed, we will update the information here, so please check back regularly for the latest updates.

Legacy Status

Based on the guidance currently avaiable, a legacy student is someone who

  • began their programme before 1 July 2026 and
  • received federal loan funds prior to 1 July 2026.

Legacy students may remain eligible for federal loans under the current regulations for the lesser of three years or their remaining time to credential, provided they meet the following requirements:

  • remain continuously enrolled and
  • are on track to complete within their expected time to credential (the original standard timeframe for their award).

When legacy status is lost

It is important to understand that legacy status is not permanent. Based on current guidance, you are expected to lose legacy status and be assessed under the new regulations if any of the following applies:

  • take a break in study (interruption, suspension, or leave of absence)
  • change course, including transferring to a different programme (PG students only)
  • change credential level, for example moving from a Diploma or Higher Education Certificate to an undergraduate programme, or from an undergraduate programme to a postgraduate programme.
  • do not complete your programme within the expected time to credential*
  • withdraw or take time-out and later return to study.

*Expected time to credential = The minimum published time to complete a programme at full-time capacity.

If you lose legacy status, you will be assessed under the new USDE regulations and loan limits.  Find more information about loan limits for legacy and non-legacy students on our website.

Information for students in a sandwich or DPS year

Based on the information released by the Department of Education so far, our understanding is that UAL Sandwich/DPS years will continue to be ineligible for federal loans. However, based on the guidance currently available, students returning for their final year are expected to retain legacy status provided they continue to meet the criteria outlined above.

A UAL Sandwich/DPS year is not currently expected to be treated as a break in studies for legacy status purposes. We will update this information when official regulations are published.

Dropping below full-time status

To remain eligible for Federal Loans, all students must be enrolled at least halftime.

From 1 July 2026, if you study below full-time intensity, your loan limits will be prorated based on your courseload.

For example:

If you study at 50% of a fulltime courseload, your loan limits will be 50% of the usual amount.

Note: Prorating does not apply to Parent PLUS loans.

Reminder: You must reapply for loans each year. Federal Loans do not automatically continue. If you plan to apply for loans you should:

Please see our How to apply for US Direct Loans webpage for more information.

How to contact us

If you have any questions about your eligibility, enrolment, progression, or plans that may affect your legacy status please email the US Loans Team at uscanadaloans@arts.ac.uk.