Student Aid Data System Gets Privacy Act Refresh
Published Date: 4/22/2026
Notice
Summary
The Department of Education updated its system that handles student financial aid info to keep things running smoothly and protect your data. This change affects students, schools, and the government, making sure eligibility and aid details are accurate and secure. You’ve got until May 22, 2026, to share your thoughts before the update goes live on April 22, 2026.
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Analyzed Economic Effects
5 provisions identified: 1 benefits, 3 costs, 1 mixed.
Legacy Borrower Transitional Rule
If you were enrolled in a program on June 30, 2026 and borrowed a Direct Loan for that program before July 1, 2026, you are treated as a “legacy” borrower and may remain eligible under pre-2026 rules for the lesser of a transitional period not to exceed three academic years or the difference between the published program length and the portion you already completed. The legacy status ends if you complete the program, stop enrollment (unless on an approved leave), or stop attending the same institution you were enrolled at on June 30, 2026. A change in an undergraduate student's major does not end the legacy status.
Enforce New Aggregate Loan Limits
The Department will track and enforce revised aggregate loan limits, including tiered unsubsidized caps for graduate and professional students, an aggregate lifetime limit for Parent PLUS borrowers per dependent, and a non-PLUS lifetime maximum aggregate loan limit. These revised caps will be applied and enforced through the Common Origination and Disbursement (COD) System.
PSLF Employer Records and Help Tool
The system will maintain a qualifying-employer database and employer certification information (including authorizing official name, title, phone, email, and digital signature with time/date) so borrowers can use the PSLF Help Tool to find and select qualifying employers and submit PSLF certifications. COD will store PSLF employer data to support Public Service Loan Forgiveness applications.
Institutions Can Set Lower Annual Loan Limits
The COD System will allow financial aid administrators at institutions to record and apply lower annual loan limits for students or parent borrowers so reduced limits are applied consistently across a specific program of study. That means your school can set a lower yearly borrowing cap and the system will enforce it.
Online Credit Checks for PLUS Loans
If you apply for a Federal Direct PLUS Loan, you (or an endorser) can initiate an online credit check through the electronic Direct PLUS Loan application; applicants with adverse credit may still qualify through a qualified endorser or a credit appeal. The COD System will record these credit check results and related documentation.
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