Loan Limit Exception Management

The One Big Beautiful Bill introduces significant new provisions including removal the Grad PLUS program and a re-structuring of loan limits across the Direct Loan program. The US Department of Education (ED) is introducing revised Direct Loan limits, effective for students borrowing after June 30, 2026. To ensure no disruption for currently enrolled students, ED has established a Loan Limit Exception (“grandfathering”) for those:

  • Enrolled in a program of study as of June 30, 2026, and
  • Who have received a federal Direct Loan for the applicable program and institution. 

Key Regulatory Provisions:

  • The exception is determined and tracked primarily by the Common Origination and Disbursement (COD) system, which has added a new <LoanLimitException> field (effective Schema v5.0d, person-level).
    • Initial Flagging: The Department of Education’s COD system will do a one-time review to automatically grant the Loan Limit Exception to:
      • Graduate students with an active Grad PLUS or Grad Unsubsidized loan, or
      • Undergraduate students with an active Subsidized, Unsubsidized, or Parent PLUS loan,
      • where the loan is for the 2025–26 award year and the loan’s Award End Date is on or after April 1, 2026.
    • Criteria: The exception is only given if the loans are tied to the same school, program CIP code, and credential level.
    • Effect: Students flagged with the Loan Limit Exception can continue borrowing under the previous (higher) loan limits.
    • Ongoing Requirements: Students will lose the exception if:
      • They are not continuously enrolled in the same degree at the same school, or
      • They exceed the allowed three-year exception period.
    • Re-Evaluation: COD will review and potentially update the exception status if:
      • New loans are originated that might make a student eligible or ineligible,
      • The school changes a loan’s Award End Date to before April 1, 2026,
      • Or the school updates the program’s CIP code or credential level.
  • Downstream ED systems (NSLDS, ISIR) will receive and use this flag for eligibility and compliance enforcement.

Institutions must correctly identify and handle students with Loan Limit Exception status to avoid federal audit and ensure students receive the maximum aid allowed under law. In order to support automating packaging, Student Financial Aid (SFA) will consume data from ED, and check if additional requirements are still met on a per term/payment period basis within the Awarding_Override_Criteria configuration script within FAS_FUND_CONFIG.csv.

Each time new data is received form ED (via ISIR or NSLDS), the student will be repackaged and leverage data from ED along with data from your SIS and within SFA to accurately identify and package your students.

Updates to Awarding Override Criteria configuration:

  • In order to access the Loan Limit Exception data from ED, the following bindings were added to Awarding_Override_Criteria configuration script within FAS_FUND_CONFIG.csv.
    • isirRecord.getField(IsirField.NSLDS_LOANLIMITEXCEPTIONFLAG).get() binding will allow you to access the "NSLDS Loan Limit Exception Flag" field received by ISIR
  • To access the student's CIP code received in the SAFI to compare with OB3 document data, the following binding is accessible
    • program.getCipCode() will allow you access to the Program CIP code received in the student's SAFI 
  • Additionally, you will now be able to set the following values within the configuration script
    • "Loan Limit Exception Indicator" by using awardInfo.withLoanLimitException()
    • "ED Loan Limit Exception" by using awardInfo.withEdLoanLimitException()
    • "Program Attendance Begin Date" by using awardInfo.withProgramAttendanceBeginDate()

Delivered Baseline Logic:

  • OB3 Document: Used to bring in data available within your SIS per program to determine additional eligibility. 
    • Within DOCUMENTS.cvs, an award year based document should be configured with OB3InterimException document code
    • Within DOCMETADATA.cvs, the OB3 Document should include the following metadata fields:
      • FirstName (values: string, required)
        • Allows you to indicate the student's first name
      • LastName (values: string, required)
        • Allows you to indicate the student's last name
      • ProgramCode (values: string containing a pipe delimiter if including multiple programs, required)
        • Represents the program that the OB3 Document applies to and should match the <ProgramCode> sent in the SAFI.
      • IsEligible (vales: enumeration of "Yes" or "No", required) 
        • Allows you to indicate that the student is eligible for a Loan Limit Exception prior to receiving data from ED
  • Awarding Override Criteria: Updated to set the “Loan Limit Exception Indicator” based on data from ED, SFA, and the OB3 Document for each student and term (starting with the 2026–27 Award Year).
    • IF ED <LoanLimitException> is present in the latest ISIR transaction
      • THEN: Set "Loan Limit Exception Indicator" and "ED Loan Limit Exception" = NSLDS_LOANLIMITEXCEPTIONFLAG
    • ELSE IF Academic Year Start Date is prior to 7/1/2026
      • THEN: Set "Loan Limit Exception Indicator" = Y
    •  ELSE IF OB3InterimException document metadata IsEligible is present for the program being packaged 
      • THEN: Set "Loan Limit Exception Indicator" = value from isEligible

UI Improvements:

Several UI enhancements were made to display the new Loan Limit Exception and Program Attendance Begin Date data providing clear visibility for staff of student-level exception status. 

  • Fund Eligibility UI (View Only)
    • Navigation: Packaging > Fund Eligibility > Direct Loan
    • Within the Fund Eligibility popup, users with "Fund Eligibility Viewer" have a comprehensive overview of the Direct Loan eligibility details, including:
      • New Loan Limit Exception Indicator (by term/payment period):
        • Displays the “Loan Limit Exception Indicator” set in the configuration for each applicable term or payment period.
      • New ED Loan Limit Exception (by term/payment period): 
        • Displays the “ED Loan Limit Exception” set in the configuration, which in the delivered baseline logic will be the latest value receive by ED (via ISIR) for each applicable term or payment period
      • New Program Attendance Begin Date (by Academic Year):
        • Displays the “Program Attendance Begin Date” set in the configuration or via the Add/Edit.
    • All fields in this section are read-only, enabling you to view updates by packaging version to easily track changes.
  • Add/Edit Functionality (Editable Fields)
    • Navigation: Packaging > Add/Edit > Direct Loan
    • Within the Add/Edit popup, users with "Package Fund Edit" can make manual adjustments to key data for Direct Loans:
      • New editable field for Program Attendance Begin Date
        • Available for all Direct Loan types: Users can adjust the Program Attendance Begin Date for each Academic Year.
        • Value Range: Accepts a date, and can be left blank.
        • Defaulting: If not specifically edited and saved, the system will automatically default to the value set in configuration if available.
        • Scope: Editing is available for both term-based and non-term programs.
        • Validation: Invalid entries will trigger clear validation errors to prompt user correction before submission.
    • Editing the Program Attendance Begin Date value does not automatically adjust the Loan Limit Exception or calculated award amount; instead, it updates the value submitted to COD.

Reporting Improvements:

The resulting “Loan Limit Exception Indicator”, "ED Loan Limit Exception", and "Program Attendance Begin Date" are available through reporting and extract views. This enables institutions to efficiently reconcile SFA student data with both ED records and their own student information systems (SIS).

    • ELSE: Set "Loan Limit Exception Indicator" = N

Business Value

Automates the accurate identification and packaging of students eligible for grandfathered loan limits, streamlining compliance and improving data reconciliation between institutional and federal records.

Steps to enable and configure

Use the Opt In UI to enable this feature. For instructions, refer to the Optional Uptake of New Features section of this document.

Offering: Student Financial Aid

  • Update Configuration Scripts:
    • Review baseline configuration for Loan Limit Exception posted on Cloud Customer Connect, and update your configuration as needed.
      • To get started, ensure that "Configuration Administration" Permission is enabled and download your existing configuration from Oracle Student Financial Aid within Administration > Configuration Administration > Download.
      • This configuration will include the pre-populated system data, which you can then update as needed referencing baseline configuration for the following workbooks.
      • DOCUMENTS.csv
        • Add a row for the new OB3InterimException document for the 2026-27 Award Year (if you have not already added this document)
      • DOCUMENTDATA.csv
      • FAS_FUND_CONFIG.csv
        • Edit the Awarding_Override_Criteria groovy configuration script for the 2026-27 Award Year referencing baseline logic and adjusting based on your institutional policy.
    • Once you've updated your configuration, navigate to Administration > Configuration Administration, and upload your zipped configuration
  • Obtain COD Loan Limit Exception Report:
    • Once provided by ED, download the Loan Limit Exception report from COD to identify students flagged as eligible by the Department of Education.
    • Review this report for accuracy before proceeding.
  • Prepare OB3 Documents:
    • Use the information from the COD report to create or update OB3 documents for all identified students, including required metadata.
    • Complete and import OB3 documents into the system.
    • Important: Ensure that your OB3 documents are imported for eligible student prior to repackaging students. If this step is missed and data from ED has not yet been received, the student will be treated as not having a Loan Limit Exception, potentially resulting in lower loan limits being assigned.
  • Validate Logic in Non-Production Environment:
    • Review and test the delivered business rules logic to ensure the prioritization and override sequence for setting the Loan Limit Exception Indicator aligns with institutional policy and federal requirements.
    • Fully test the end-to-end process, including importing OB3 documents, ingesting ED data, and evaluating awarding outcomes for various student scenarios.
    • Confirm that staff with "Fund Eligibility Viewer" can view the Loan Limit Exception Indicator per term within the fund eligibility screen.
  • Repackage Students:
    • After successful testing in non production, you will need to load in your OB3 documents and updated configuration to production, then repackage your students to adjust their funding as needed.
      • Divide your bulk repackaging operation into manageable groups, taking into consideration processing windows, communication needs, and the availability of supporting resources. This approach will ensure you are well-equipped to assist students whose inquiries arise as a result of the repackaging process.
  • Submission to COD:
    • When you are ready to begin awarding and originating Direct Loans for the 2026-27 Award Year, follow the steps to enable within 2026-2027 Award Year Packaging Updates and 2026-2027 Award Year COD File Updates.
  • Monitor and Maintain:
    • Review updates to reporting views and product reports, and determine if updates are needed to your institutional reporting
    • As new ED files (COD, ISIR, NSLDS) are received, ensure the system automatically reevaluates the indicator for currently eligible or new students.
    • Periodically reconcile student data with federal records to maintain accuracy.

Tips and considerations

  • Logic Customization Needed: Institutions can enable Loan Limit Exception eligibility by updating the Awarding_Override_Criteria configuration to evaluate additional requirements within the script or by using the delivered baseline document approach, which involves enhancing SIS integration to assess these requirements and transmit them through a new OB3 document.
  • Future implementation: Within a subsequent baseline configuration release additional logic will be added to check for more advanced scenarios. If your institution would like to send in additional metadata to check for these conditions, you could add these changes now, or you can identify the affected population and manually address students as needed.
    • Updated Configuration Approach (not included in initial 26B baseline configuration):
      • Future Baseline Updates to OB3 Document:  
        • ContinuousEnrollmentIndicator (values: enumeration of "Yes" or "No", optional).
          • Represents whether student has no longer met continuing enrollment criteria for loan limit exception eligibility.
        • ProgramCIPCode (values: string containing classification, optional)
          • Represents valid loan limit exception eligible CIP code and should match the <ProgramCIPCode> sent in the SAFI.
        • CredentialLevel (values: enumeration of Certificate (Graduate), Certificate (Undergraduate), Associate, Bachelors, Graduate, Doctoral, Certificate (Post Baccalaureate), Non-credential, Certificate (Doctoral), optional)
          • Represents valid loan limit exception eligible credential level and should matching <ProgramType> sent in the SAFI.
        • DoesNotExceedPublishedProgramLengthIndicator (values: enumeration of "Yes" or "No", optional) 
          • Represents whether student's academic year exceeds published program length duration and is ineligible for loan limit exception.  
        • ProgramAttendanceBeginDate (format: date YYYY-MM-DD)
          • Optional value to be submitted for eligible external students into 4 year undergraduate programs with an articulation agreement, and will be transmitted to COD.
      • Future Updates to Awarding Override:
        1. Find the latest OB3InterimException document for the award year whose Program Code field contains the current packaged program code.
        2. Parse document metadata (IsEligible, Continuous Enrollment Indicator, and Does Not Exceed Published Program Length Indicator as Yes/No and Program Attendance Begin Date as YYYY-MM-DD date
        3. Determine the latest dated ED loan limit exception value from ISIR
        4. Set the base Loan Limit Exception value by using latest dated ED and if it doesn't exist use OB3 IsEligible, and if both don't exist set to N
        5. If the Academic Year Start Date is prior to 7/1/2026, force the base value to Y
        6. If the award year is later than 2028-2029 (awy > 2029), force the base value to N
        7. If a matching OB3 document exists, mark the student ineligible for the exception if any present optional disqualifier fails:
          • Continuous Enrollment Indicator = No
          • Does Not Exceed Published Program Length Indicator = No
          • Program CIP Code does not match the current program CIP code
          • Credential Level does not match the current program type
        8. If any disqualifier fails, set the computed Loan Limit Exception to N. Otherwise keep the base value.
        9. If the award year is still within the interim window, no disqualifier failed, and a valid Program Attendance Begin Date is present, allow a one-way N -> Y override and store the attendance begin date.
        10. If the current date is after the term end date, or the current payment period already has a disbursed disbursement, retain the existing term-level Loan Limit Exception Indicator instead of replacing it.
        11. Regardless of that freeze behavior, still write ED Loan Limit Exception = latest ED value and Program Attendance Begin Date = parsed OB3 date if valid
    • Manual Approach:
      • You can use reporting to access the new calculated “Loan Limit Exception Indicator” and "ED Loan Limit Exception" fields as well as the student's ISIR data, and for students who do not meet additional checks and ED data indicates they are eligible for exception, you can use adjust their funding accordingly.
  • Leverage the COD Loan Limit Exception Report: It is suggested that you use the COD Loan Limit Exception report to proactively import eligibility information via OB3 documents before origination records are sent or received for a student. This helps ensure accurate packaging and prevents unnecessary delays in awarding.
  • Awarding Override Criteria Defaults: If no “Loan Limit Exception Indicator” is set in the Awarding_Override_Criteria configuration script, the system will default to using the latest Loan Limit Exception Indicator sent via ISIR for further calculations. If either are not there, the student will be treated as not having a Loan Limit Exception, potentially resulting in lower loan limits being assigned.
  • Migrating from Interim Configuration Approach: If you are using the existing One Big Beautiful Bill (OB3) - Interim Exception Document, please ensure that your awarding override criteria configuration is updated.
  • Timely Data Updates: Regularly update OB3 documents and review ED data files (COD, ISIR, NSLDS) to ensure that all loan limit exception statuses are current and reflect the latest enrollment and program information.
  • Continuous Eligibility Monitoring: Maintain accurate data in your SIS regarding program CIP codes, credential levels, and continuous enrollment, as changes to these fields may affect a student's exception status.
  • Data Reconciliation: Periodically reconcile institutional records with federal data sources using reporting views to catch discrepancies early and avoid compliance issues.

Key resources