Federal Direct Unsubsidized Loans for Graduate and Professional Students:

• Updated Limits for Graduate Student Unsubsidized Loans:
  • Up to $20,500 per year
  • $100,000 lifetime borrowing limit
    (excluding undergraduate loans)
• Updated Limits for Professional Student Unsubsidized Loans
  (For programs such as Dentistry, Medicine, Law, etc.)
  • Up to $50,000 per year
  • $200,000 lifetime borrowing limit
    (excluding undergraduate loans).

Federal Graduate PLUS Loans:

• Federal Graduate PLUS Loans will be phased out beginning July 1, 2026.
• After this date, Graduate PLUS Loans will not be available for new borrowers or existing borrowers currently enrolled in a program with an expected time to completion of more than three (3) years.

Federal Parent PLUS Loan:

• All parents (combined) may borrow up to $20,000 per year per dependent student, with a $65,000 aggregate limit per dependent student (without regard to amounts forgiven, repaid, canceled, or discharged).

Updated Lifetime Limits for All Federal Loan Programs:

• $257,500 lifetime borrowing limit on all federal student loans (excluding any loan amounts for Federal Parent PLUS Loans, Graduate PLUS Loans, Consolidation Loans, Health Education Assistance Loans (HEAL) and Health Professions Student Loans).

Professional Degree Program Classification

• Draft definition appears to interpret “professional degrees” more narrowly to include: Pharmacy (PharmD), Dentistry (DDS or DMD), Veterinary Medicine, (DVD), Chiropractic (D.C. or DCM), Law (LLB or J.D.), Medicine (M.D.), Optometry (O.D.), Osteopathic Medicine (D.O.), Podiatry (DPM, D.P., or PodD), Theology (MDiv or MHL) and Clinical Psychology (PsyD or PhD).
• Other programs may qualify as professional when rulemaking is finalized.

Current borrowers who meet specific criteria will remain eligible for their current limits for the remainder of their or their dependent’s current program, or for three years, whichever is less.

Who Is Considered a “New Graduate Loan Borrower” Under OBBBA?

Under OBBBA, new graduate loan borrowers are defined in a very specific way. This definition is important because it determines who is affected by the phase-out of the Graduate PLUS Loan, and who may keep their current borrowing limits.

A “new graduate loan borrower” is someone who begins a new graduate or professional program on or after July 1, 2026.

This includes students who:

• Are enrolling in a graduate or professional program for the first time; or
• Previously completed a graduate or professional program but are now starting a different program (i.e., finishing a master’s degree and then enrolling in law school).

What Does This mean?

These changes mean it’s more important than ever to understand how much you’ve already borrowed because it could directly impact how much federal aid you will be eligible for. It also means that many students will have to rely on private financing to help cover remaining tuition and out-of-pocket costs.

Private financing programs are unsecured educational loans offered by banks, credit unions, and other lenders. These loans must be repaid with interest. Rates and fees depend on your creditworthiness and sometimes that of a co-borrower. Most lenders require a minimum credit score of around 640 for loan approval.

Some lenders also offer alternative loan programs for residents of certain states, so check our Loans page to see if you qualify.

Creditworthiness

Creditworthiness refers to your ability to repay a loan based on your credit history. Lenders look at your credit score, payment history, and overall financial behavior to decide whether or not to approve your loan and what interest rate to offer.

A strong credit profile can mean lower interest rates and fewer fees, saving you money over time. If your credit score is low or you have limited credit history, lenders may see you as a higher risk, which can lead to higher costs or even denial of your application.

Some tips to build and maintain good creditworthiness:

• Pay bills on time.
• Keep credit card balances low.
• Avoid opening too many accounts.
• Maintain older accounts.
• Check your credit report regularly.
• Build credit responsibly.
• Limit hard inquiries.

What You Should Do Right Now to Prepare

Now is the perfect time to check your credit, understand your credit rating and take steps to strengthen it if needed. You can start by obtaining a free credit report. Reviewing your credit report for errors, paying down existing debt, and making payments on time to improve your score before applying are all steps you can take now to prepare.

If your score isn’t quite there yet, don’t stress. Many students look to a credit-worthy co-signer to help secure a private loan.

Securing Private Financing: Co-borrowers

If you’re not considered credit-worthy, don’t worry. The most common and effective solution is applying with a co-borrower who has strong credit.

A co-signer or co-borrower is someone who agrees to share responsibility for the loan and helps reassure the lender that the loan will be repaid. This is usually a parent, guardian, or trusted relative who has strong credit and is supportive of your educational goals.

Undergraduate students usually need a co-borrower. Graduate students can apply for private financing on their own, but may still benefit from having a co-borrower, for example, to qualify for better interest rates. Remember: This is a serious commitment, and the co-borrower is legally responsible for repayment if you cannot pay.

Beyond loans, students are often surprised by how many scholarship opportunities exist. This is also great time to look for scholarships and/or assistantships offered by:

• Your academic department or professional school
• Private and public organizations
• Foundations
• Professional associations
• Employers
• Community groups
• Churches

These awards can be based on your qualifications, your academic background, your field of study, or professional experience.

Take time to explore scholarship search engines and professional associations in your intended field of study. Seeking scholarships and applying for them is a proactive process, but even modest awards can make a meaningful difference in reducing what you pay out of pocket.

Pursuing higher education is one of the most meaningful long-term investments you can make in yourself. And like any investment, it requires planning and sometimes, sacrifice. We strongly encourage you and your family to prepare and position your personal financial resources now.

Planning ahead, understanding your past borrowing, knowing your credit, exploring your private loan options and proactively seeking scholarships will set you up for a smooth transition to the new borrowing policies under OBBBA.

Evaluating your and your family’s existing expenses and cost of living, as well as finding creative ways to make temporary adjustments, can help minimize out-of-pocket expenses and minimize the amount you need to borrow to cover those educational expenses.

You and your family might also consider reallocating or repositioning personal investments, when appropriate, because ultimately, pursuing higher education is an investment that pays dividends in career advancement, earning potential and professional growth.

Big changes are coming to graduate student loans under the One Big Beautiful Bill Act, impacting prospective students, newly admitted students, and new federal loan borrowers beginning July 1, 2026. Watch this video to learn what’s changing, how it affects your borrowing options, and the steps you can take now to plan for graduate school with confidence.