“Interim Exception” and Borrowing Limits
Beginning in 2026-2027, federal student loan borrowers will be subject to limits established by the 2025 One Big Beautiful Bill Act (OBBBA, also known as the Working Families Tax Cuts Act or H.R. 1). When signed into law, this legislation made sweeping changes to federal student aid programs.
In establishing new loan limits, congress exempted some existing federal loan borrowers from the new rules for a limited time. This has come to be known as the “interim exception.” Note that borrowers qualifying for the interim exception have also been referred to as “legacy borrowers.”
See additional information from Federal Student Aid on this and other Important Definitions.
Interim Exception (or Legacy) Borrowers
If you meet the requirements for the interim exception, you will have a limited period of time to qualify for Direct Loans under the pre-OBBBA limits. Qualification for the interim exception is based on your existing borrowing history, your enrollment, and your degree progression. If you qualify for the interim exception, you may not opt out of it to borrow under new OBBBA loan limits.
Learn more about the qualifying criteria.
Maintaining Interim Exception Eligibility
Qualifying for the interim exception in one term does not guarantee future eligibility. To continue borrowing under the pre-OBBBA loan limits, you must continue to meet the interim exception requirements each term. If you no longer meet those requirements, your future borrowing will be evaluated under the new loan limits. There is no appeal process for interim exception eligibility.
To help maintain your eligibility:
- Stay enrolled in your current program. Undergraduate students pursuing a bachelor’s degree can change majors and still are considered to be in the same program regardless of their concentration or school/college. At the graduate and professional level, any change in your degree program could impact your interim exception borrowing eligibility. This is particularly important to note for students enrolled in multiple programs simultaneously. Switching enrollment between programs will likely result in loss of interim exception eligibility.
- Avoid breaks in your enrollment. If you withdraw completely from any term or if you sit out for a standard term in your program (e.g.: fall or winter), new Federal Student Aid rules view this as ceasing enrollment in your program (regardless of the reason and even if it is temporary). Once you cease enrollment in your current program, you are no longer eligible for the interim exception.
- Be aware of the time limit. The interim exception is only available for a limited time. It expires if you have attended for the standard length of your program or after the 2028-29 academic year (three academic years from the OBBBA date of enactment), whichever comes first.
To estimate your remaining time, subtract the time you have already enrolled in your program from the published length of the program. For example, if you are completing a four-year undergraduate degree and you have already enrolled for three years, you have one year remaining to qualify for the interim exception. If you are completing a two-year masters degree and have already enrolled in a year and a half, you only have one remaining term of interim exception eligibility.
Your remaining eligibility is based on the standard length of the program, not your individual pace, remaining credits, or full-time/part-time enrollment choices.
Appeals and Special Exceptions
Federal Student Aid rules do not allow appeals related to interim exception eligibility. The Office of Financial Aid is not authorized to grant, extend, or make exceptions to interim exception status.
Borrowers who qualify for the interim exception remain eligible only while they continue to meet the federal requirements and only until the temporary eligibility period ends.
Want to learn more about OBBBA changes?
Visit our Key Information for Financial Aid page.