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What should currently enrolled law students know about the impact of the federal financial aid changes?

Currently enrolled law students may be aware of changes to federal financial aid following the enactment of the One Big Beautiful Bill Act (OBBBA), also referred to as the Working Families Tax Cuts Act. These changes affect loan borrowing limits based on:

Degree program
Enrollment intensity
The types of loans available
Repayment plan options

The rules primarily affect students beginning their studies in fall 2026 or later. Students who were already enrolled in law school before July 1, 2026 – and who are currently using federal student loans to fund their degree program – will be affected differently from students starting degree programs after this date.

Here is what current law students need to know when planning to finance the remainder of their legal education.

What changes under OBBBA affect currently enrolled law students?

Students qualify for legacy protection (also known as an interim exception in financial aid terminology) if and only if they meet both of the following requirements:

They were enrolled in their degree program as of June 30, 2026.
They received a Direct Loan disbursement for that program before July 1, 2026.

Legacy protection preserves access to previous borrowing limits and Graduate PLUS loans during the remainder of a student’s expected time to credential. The expected time to credential is the shorter of:

Three academic years OR
The remaining published length of the program

Different ASU Law programs have different expected times to credential, so access to legacy protection will vary based on a student’s degree program and enrollment type.

Students with legacy protection may still be affected by other OBBBA changes, including loan proration for part-time students and changes to repayment options.

What should current JD students know?

A student who began the JD program before July 1, 2026, received a qualifying Direct Loan and remains in the same program may continue borrowing under the legacy limits during the protected period.

The expected time to credential for the JD is three academic years.

Full-time students: JD students who are enrolled full time and remain continuously enrolled will have access to legacy protection for the remainder of their enrollment.
Part-time students: JD students enrolled part time will have legacy protection for only part of their remaining enrollment. Once a student reaches three academic years from their start term, legacy protection will end and the student will be subject to the new rules. Additionally, students enrolled less than full time are still subject to loan proration.

Changes in enrollment – including a withdrawal, program change or delay in graduation – could affect the availability of legacy protection based on the continuous-enrollment requirement.

Students considering an enrollment change should speak with Financial Aid before making a decision.

What should current legal master’s students know?

A student who began the MLS, MLS Health, MSLB, MHREL or LLM program before July 1, 2026, received a qualifying Direct Loan and remains in the same program may continue borrowing under the legacy limits during the protected period.

The expected time to credential for ASU Law’s legal master’s degrees is two academic years.

Master’s students who have already been enrolled for two academic years will not have access to legacy protection for the remainder of their enrollment.
Master’s students who have been enrolled for less than two academic years will have access to legacy protection only until they reach two years from the time they started the program.

Students who no longer have access to legacy protection — or who may lose access before completing their degree — should understand how federal loan availability has changed.

Federal loan limits for graduate students before and after July 1, 2026

Comparison of federal graduate loan rules before and after July 1, 2026
Before July 1, 2026	Loan type	On or after July 1, 2026
Graduate students may borrow up to $20,500 annually and $138,500 in aggregate, including undergrad.	Direct Unsubsidized Loans	Graduate students may borrow up to $20,500 annually and $100,000 in aggregate, NOT including undergrad.
Students may borrow up to the cost of attendance minus other financial assistance.	Grad PLUS Loans	Grad PLUS is phased out for some prior borrowers and discontinued for new borrowers.
$138,500 in subsidized and unsubsidized loans (including undergraduate loans). No limit on Grad PLUS loans.	Lifetime Aggregate Limit	$257,500 in total Title IV loans (Direct and Grad PLUS) without regard to amounts repaid, forgiven, canceled or otherwise discharged.

Master’s program scenario 1

An MLS student has remained continuously enrolled and attended the full 2024-25 and 2025-26 academic years. The student needs one remaining year in 2026-27 to complete the degree.

Based on the two-year expected time to credential, the student would have no legacy protection eligibility as of July 1, 2026, because they have already reached the program’s two-year length.

Master’s program scenario 2

An MLS student has remained continuously enrolled since spring 2025 and attended the full 2025-26 academic year. The student needs three additional semesters — fall 2026, spring 2027 and fall 2027 — to complete the degree.

Based on the two-year expected time to credential, the student would have legacy protection through the fall 2026 semester. Beginning in spring 2027, the student would no longer have legacy protection because they would have reached the program’s two-year length.

How does part-time enrollment affect federal loan eligibility?

Students who attend less than full time will be subject to loan proration, also known as the schedule of reductions in financial aid terminology.

Students should keep the following points in mind:

Part-time students will have their Direct Loan eligibility reduced in proportion to full-time enrollment.
This change begins in the 2026-27 academic year.
Proration applies to new and continuing part-time students, including students with legacy protection.
The reduced limits apply to tuition and fees as well as the total cost of attendance.

For example, a student taking six credits toward a nine-credit full-time course load could expect to receive about two-thirds of the applicable annual loan amount.

ASU students must enroll in at least five credits to receive financial aid. ASU also considers five credits as half-time enrollment for graduate and professional students.

Part-time enrollment can help students balance their education with work, family and other responsibilities. However, students should assess the financial effects before selecting their enrollment intensity when possible.

The ASU Loan Calculator is available for campus immersion and online students to review expected prorated amounts.

How are federal loan repayment options changing?

Repayment options are changing based on when borrowers commenced their loans. Additional information about these changes is available through Federal Student Aid.

Access to legacy repayment plans is separate from legacy protection for borrowing. A student who qualifies for legacy borrowing provisions should not assume that the same protections apply to every repayment option previously available.

Public Service Loan Forgiveness remains in effect. Borrowers pursuing public-interest careers should continue to confirm that their repayment plan, loan type and employment meet current requirements.

How should students plan financially?

Students with legacy protection for the remainder of their enrollment may be able to maintain their current law school financial plans.

Students who will have additional semesters or terms of enrollment after legacy protection ends should consider the following steps:

Start planning now: Account for tuition, fees, living expenses and other necessary costs throughout your remaining enrollment.
Consider saving additional funds: Saving while you have access to legacy protection may help offset costs after the protected period ends.
Keep your finances in order: Check your credit, which may be assessed as part of the application process for additional loans.
Explore scholarships and grants: Funding from JD upper-level activities or outside organizations may help defray additional tuition and fee costs. The ASU Law Financial Aid and Scholarships page is a helpful resource.
Create and follow a budget: Review your anticipated expenses and spend carefully throughout your remaining enrollment.

How can ASU help students through the transition?

ASU Law’s Financial Aid office can help you understand which rules apply to your program and enrollment plan.

ASU Law’s financial aid resources can help students:

Review scholarships, federal aid, private loans and other payment resources
Estimate how part-time enrollment may affect federal loan eligibility and availability
Consider the financial consequences of changing programs or enrollment

Additional information is available on the ASU federal updates website and through Federal Student Aid.

Contact ASU Law Financial Aid at [email protected] for more information or to discuss your options.