Enhanced loan limit exception management

The One Big Beautiful Bill introduces significant new provisions including removal of 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.

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 from 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.

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 eligible borrowers. At implementation, COD applies the person-level <LoanLimitException> flag for borrowers with qualifying 2025–26 Direct Subsidized, Unsubsidized, and PLUS Loans with an Award End Date on or after 04/01/2026.
    • Initial Flagging for Graduate and Professional Borrowers: Graduate and professional borrowers qualify if they have a 2026–27 Direct Loan Graduate PLUS award with a Financial Award Begin Date or Earliest Disbursement Date before 07/01/2026, or a Graduate Direct Loan Unsubsidized award with an Earliest Disbursement Date before 07/01/2026, with a Financial Award Amount greater than $0; or a 2025–26 Direct Loan Graduate PLUS or Graduate Direct Loan Unsubsidized award with a Financial Award End Date on or after 04/01/2026, with a Financial Award Amount greater than $0.
    • Initial Flagging for Undergraduate Borrowers: Undergraduate borrowers qualify if they have a 2026–27 Direct Loan Parent PLUS, Unsubsidized, or Subsidized award with an Earliest Disbursement Date before 07/01/2026, with a Financial Award Amount greater than $0; or a 2025–26 Direct Loan Parent PLUS, Unsubsidized, or Subsidized award with a Financial Award End Date on or after 04/01/2026, with a Financial Award Amount greater than $0. 
  • Criteria: The exception is only given if the borrower was enrolled as of June 30, 2026, in a program of study at an eligible institution and already had a qualifying loan, or had a parent receive a qualifying loan on the student’s behalf, for that program context.
    • For graduate and professional borrowers, COD uses the first reported Program CIP Code and Program Credential Level.
    • For undergraduate borrowers, COD uses the first reported Program Credential Level. The Enrollment Status Effective Date should be the most recent enrollment date corresponding to CIP Code 1.
  • Effect: Students flagged with the Loan Limit Exception can borrow under the previous loan limits instead of the new loan limits that otherwise apply on or after July 1, 2026.
    • NSLDS uses the COD-reported Loan Limit Exception flag to determine whether the borrower is treated under the pre-OBBBA aggregate limits or the new aggregate limits. 
  • Conditions for Retaining the Exception: Students will lose the exception if they are not continuously enrolled at the same school in the same program of study, or if they exceed the allowed three academic year exception period.
    • Students will also lose the exception if the school reports Enrollment Status W for Withdrawn or A for Leave of Absence of more than 180 days. Reporting either of those values breaks the Loan Limit Exception and causes the new loan limits to apply. See Support of COD Reporting for Enrollment Status Data feature for further details on how this data is reported to COD.
  • Re-Evaluation: COD will review and potentially update the exception status when it receives and processes new or updated award records, including new originations and school updates to Award End Date, CIP code, or credential level on previously accepted loans.
    • If the new loan has an Earliest Disbursement Date before 07/01/2026, COD uses the earlier matching path.
    • If the loan’s EDD, or for Grad PLUS the EDD and Award Begin Date, is on or after 07/01/2026, COD checks the Enrollment Status Effective Date.
      • If the Enrollment Status Effective Date is on or after 07/01/2026, COD does not apply the exception.
      • If the Enrollment Status Effective Date is before 07/01/2026, COD checks the student’s prior loans in award years 2017–18 through the current award year.
      • If the student has an applicable prior loan for the same school, program, and/or credential level in the most recent award year, COD applies the exception.
      • If the student does not have an applicable prior loan, COD does not apply the exception. 
  • Downstream ED Systems: NSLDS will receive and use the Loan Limit Exception flag from COD for aggregate loan limit processing, eligibility monitoring, and related post-screening updates. The 2026–27 ISIR NSLDS Information block was also updated to support new aggregate loan limits, academic levels, and loan limit exception flags.

Oracle Student Financial Aid can calculate the Loan Limit Exception for Direct Loan borrowers by using the Awarding_Override_Criteria Groovy script within FAS_FUND_CONFIG.csv starting with the 2026-27 Award Year:

  • Awarding Override Criteria: Enhanced to allow you to set the “Loan Limit Exception Indicator” based on data from ED, SFA, and the exception data sent in via OB3 Document (starting with the 2026–27 Award Year).
    • Rule sequencing
      • The configuration consists of a prioritized sequence of business rules and applies freeze protection to completed academic years and already-disbursed payment periods.
      • The system projects the Loan Limit Exception for up to three academic years from the starting year.
      • Interim Exception Starting Year = the first packaged academic year that overlaps 07/01/2026, or, if no academic year is in session on that date, the next packaged academic year after it..
    • ED data handling
      • When ED data is on file, the delivered baseline uses the most recently received ED Loan Limit Exception value available in the supported sources.
      • When ED data is missing, the delivered baseline can use the Temporary School Interim Exception Value (Pre-ED Only) in the OB3InterimException document.
        • If the Temporary School Interim Exception Value (Pre-ED Only) is blank or omitted and ED data is also missing, the student is treated as not having a Loan Limit Exception until qualifying ED data or a temporary school value is on file.
    • Overriding Program applicability
      • If a OB3InterimException has been received and the matching Program Code is identified, the system compares the current SAFI program details to the OB3InterimException document metadata fields such as Credential Level and Program CIP Code.
        • If the Program Code matches but the Credential Level does not match the student’s current SAFI program type, the Loan Limit Exception result is overridden to No for the evaluated academic year, even if ED currently shows Yes.
        • If the Program Code matches but the Program CIP Code does not match the student’s current SAFI Program CIP Code, the Loan Limit Exception result is also overridden to No for the evaluated academic year, even if ED currently shows Yes, for the following program types:
          • Graduate
          • Doctoral
          • Certificate (Graduate)
          • Certificate (Doctorate)
    • Continuation and COD date handling
      • The system will use the Interim Exception Expiration Date Override if one is provided in the OB3InterimException document, rather than using the three academic years from the starting year.
        • The system does not automatically end the exception based on the student attendance.
      • The system also sets the resolved COD Enrollment Status Effective Date.
        • If the matching document slot contains a valid COD Enrollment Status Effective Date Override, that date is used.
        • Otherwise, the system uses SAFI ProgramStartDate.
    • Additional loan limit handling for affected Direct Loan funds:
      • PLUS, DUNSUB, and GPLUS
        • For PLUS, DUNSUB, and GPLUS, the delivered logic includes protection for cases where the student has already received disbursements in the same academic year above the new non-exception limit.
        • In those cases, the system preserves the amount already disbursed for that academic year and prevents additional borrowing above that preserved amount.
      • DSUB
        • DSUB still uses the Loan Limit Exception result and COD Enrollment Status Effective Date reporting, but it does not have the same preserved-disbursement handling in this release.

Updates to the Awarding_Override_Criteria configuration

Configuration now has access to NSLDS and COD loan limit exception date.

  • See the attached SFA 26.4.2 Configuration Updates (New Config) and SFA 26.4.2 Configuration Scripting API on Cloud Customer Connect for full details about the new bindings provided.

Baseline configuration

Oracle provides baseline configuration to help institutions implement this feature to set student's Loan Limit Exception data. 

  • Review the related Feature Configuration Guide attached to the release notes post on Cloud Customer Connect to understand the delivered configuration changes and determine whether refinements are needed for your implementation.

Business benefit: This helps institutions package Direct Loans under the correct grandfathered or new loan limits, maintain consistency with ED data, and reduce disruption for eligible borrowers while preserving controls for program-specific and time-limited exception eligibility.

Here's the demo of these capabilities:

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 when it is 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)
      • DOCMETDATA.csv
        • Add metadata fields for Program Code, Temporary School Interim Exception Value (Pre-ED Only), Credential Level, Program CIP Code, Interim Exception Expiration Date Override, Interim Exception Expiration Date Override Reason, and COD Enrollment Status Effective Date Override.
          • If you already added this document when the initial Loan Limit Exception Management feature was delivered in 26B, ensure new metadata fields are added.
      • 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.
          • This logic would replace the logic that you added to Awarding_Override_Criteria when the initial Loan Limit Exception Management feature was delivered in 26B,
    • 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 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.
  • 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 and by using the delivered baseline document approach to bring in additional school-managed program information through the OB3 document.
  • Renamed OB3 Document Metadata fields
    • Temporary School Interim Exception Value (Pre-ED Only) replaces previous isEligible: Use this only when ED data is not yet on file. It is not intended to override a current ED No. If it is blank or omitted while ED data is also missing, the student is treated as not having a Loan Limit Exception.
      • For environments where OB3InterimException documents have already been loaded using deprecated metadata fields, those metadata rows must remain in DOCMETADATA. They can be updated to Is_Required = FALSE, and institutions can stop sending values for those fields in new document imports.
      • Because historical transactional document data remains associated with the metadata definition, removing those metadata rows from configuration will be blocked. The fields may continue to appear on the View Document screen in those environments, but they are no longer required or used by the updated OB3 logic. When they are set to optional, they can be omitted from document messages submitted to MPG.
      • For production or any environment where no OB3InterimException document data has been loaded using First Name / Last Name, those deprecated metadata fields can be removed when loading the updated configuration.
      • For isEligible, the field should remain in the configuration. It is being renamed to Temporary School Interim Exception Value (Pre-ED Only) in the updated document structure shared in the draft materials, but it retains the existing Attribute_Code of AC1201. In other words, update the metadata name/label and required setting as reflected in the provided DOCMETADATA workbook, but do not replace it with a new field code.
  • Credential Level and Program CIP Code remain important program checks: If Program Code matches but Credential Level does not match the current SAFI program type, the Loan Limit Exception result is overridden to No, even if ED currently shows Yes. Program CIP Code can also override the result to No for Graduate, Doctoral, Certificate (Graduate), and Certificate (Doctorate) programs when the CIP value does not match the current SAFI Program CIP Code.
  • Enrollment Status Effective Date is now configurable: If no document override is supplied for the matching program set, the configuration falls back to SAFI ProgramStartDate. See Support of COD Reporting for Enrollment Status Data feature for further details.
  • Leverage the COD Loan Limit Exception Report: It may be useful to use the COD Loan Limit Exception report to prepare or update OB3 documents before origination records are sent or received for a student.
  • Timely Data Updates: Regularly update OB3 documents and review ED data files so that Loan Limit Exception statuses reflect the latest program and enrollment information.
  • Data Reconciliation: Periodically reconcile institutional records with federal data sources using reporting views to catch discrepancies early.
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Key resources

Access requirements

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