As part of the sweeping changes to federal student aid, the Graduate PLUS Loan Program is set to be eliminated for new borrowers beginning July 1, 2026. This change represents one of the most significant shifts in graduate-level borrowing in recent decades.  Graduate and professional students will no longer have access to Graduate PLUS loans to cover the full cost of attendance beyond other aid.

Whether these changes apply to you – and to what extent – depends largely on when you first borrowed federal graduate-level loans and whether you remain continuously enrolled in the same program.  The following outlines how borrowers are categorized under the new law and what each group can expect.

Current borrowers who borrowed a loan before July 1, 2026:

CURRENT graduate or professional borrowers include those who borrowed federal graduate-level loans, including Direct Unsubsidized or Graduate PLUS loans, for a term that began before July 1, 2026, and remain continuously enrolled in the same graduate or professional program at the same institution. The Limited Exception\Legacy Provision (otherwise referred to as “grandfathering”) allows eligible graduate and professional students to  continue to borrow under the current loan rules for:

• Up to three academic years; or
• The remainder of your expected time to credential, whichever is less.

Time already completed in your program is expected to count toward this limit. Students may not automatically receive three additional years of borrowing if they are already partway through their program.

To maintain eligibility for this provision, you must remain continuously enrolled, at least half-time in the same degree program at the same institution.  The following changes to your enrollment may cause you to lose grandfathered status and become subject to the new lifetime cap:

• Taking a leave of absence
• Withdrawing from the institution
• Dropping below half-time enrollment
• Transferring to a different degree program

Details about how this timeframe will be calculated across different programs are still forthcoming. We will continue to publish updates as we receive them.

With the elimination of the Graduate PLUS loan program, Federal Direct Unsubsidized Loans will become the primary federal borrowing option for most graduate and professional students. The annual and aggregate limits for these loans have changed, and for many students, particularly those in high-cost professional programs, these limits may still fall short of covering the full cost of attendance. The updated limits vary depending on whether you are enrolled in a general graduate program or a qualifying professional degree program, such as medicine, dentistry, or law.

Federal Direct Unsubsidized Loans for Graduate and Professional Students:

• Updated Annual and Lifetime Limits for Graduate Student Unsubsidized Loans:
  • Up to $20,500 per year
  • $100,000 lifetime borrowing limit (excluding undergraduate loans)
• Updated Annual and Lifetime 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)

Professional Degree Program Classification

Recent guidance indicates that the federal definition of “professional degree programs” is being updated and interpreted with a more specific framework than before. Early regulatory drafts appear 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).

The new law brings significant changes to the Federal Parent PLUS loan program, which allows parents of dependent undergraduate students to borrow federal loans to help cover the costs of their child’s education.  Beginning July 1, 2026, new annual and aggregated borrowing limits will be imposed on Parent PLUS Loans for new borrowers, a notable departure from the current program, under which parents can borrow up to the full cost of attendance minus any other financial aid received.  As with the graduate loan changes, whether these new limits apply to you will depend on when you first borrowed a Parent PLUS Loan and whether your dependent student remains continuously enrolled in the same academic program.

New Borrowers:

Parents who borrow their first Parent PLUS Loan on or after July 1, 2026, will be considered NEW borrowers. These borrowers will be subject to updated Parent PLUS Loan borrowing limits.

The combined annual borrowing limit will be $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).

Current borrowers who borrowed a loan before July 1, 2026:

Current Parent PLUS Loan borrowers are those who obtained a Parent PLUS Loan before July 1, 2026, for a dependent student’s current academic credential, provided that the student remains in the same credential (i.e. BA or BS). These borrowers may borrow loans up to the current limits for up to three (3) academic years, or the remainder of their dependent student’s expected time to degree completion, whichever is less.  Students may not change their credential level, for instance go from a bachelor’s to a master’s degree and maintain eligibility but that can change majors within their credential.

In addition to the program-specific annual and lifetime limits outlined above, the law establishes an overall aggregate cap on the total amount a student may borrow in federal student loans across their entire academic career. Regardless of the type of degree pursued or the number of programs attended, borrowers will be subject to a combined federal lifetime borrowing limit. It is important to note that this aggregate cap applies to most federal loan types, but certain loan categories are excluded from the calculation.

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

Federal student loan limits are generally based on full-time enrollment, and the new law borrowing amounts will be adjusted for all students who attend less than full-time.  This means that students enrolled on a half-time basis may not be eligible to borrow the full annual loan limit, as their loan eligibility will be prorated to reflect their reduced enrollment status. These adjustments are intended to more closely align borrowing with actual enrollment and educational costs, but they may present a challenge for students who rely on loan funding to cover living expenses and other costs beyond tuition while attending school at a reduced course load.  Students considering less-than-full-time enrollment should factor these potential reductions into their financial aid planning.

Graduate students enrolled less than full-time may have their federal loan eligibility reduced based on their enrollment level.

For financial aid purposes, graduate students in master’s programs are considered full-time when enrolled in 8 units or more (6 units for doctoral students). Students enrolled below these thresholds will have their federal loan eligibility adjusted proportionally based on their enrollment level.

How Eligibility Is Calculated

Formula:

Credit Hours Enrolled ÷ 8 Credit Hours (Full-Time Enrollment) = Enrollment Percentage

Your enrollment percentage is then applied to the maximum annual loan eligibility.

Full-Time Annual Loan Amounts

Examples of Less-Than-Full-Time Enrollment

Loan amounts are rounded to the nearest dollar.

Example Calculation

A graduate student enrolled in 5 credit hours:

Step 1: Calculate enrollment percentage

5 credit hours ÷ 8 credit hours = 62.5%

Step 2: Apply the percentage to the annual loan limits

Direct Unsubsidized Loan

$10,250 × 62.5% = $6,406

Graduate PLUS Loan

$28,275 × 62.5% = $17,672

The student would be eligible for approximately $6,406 in Direct Unsubsidized Loan funds and $17,672 in Graduate PLUS Loan funds, provided all other federal eligibility requirements are met.

Important Information

Students must be enrolled at least half-time to be eligible for federal student loans.

Actual loan eligibility may vary based on cost of attendance, other financial aid received, aggregate borrowing limits, and federal eligibility requirements.

Graduate PLUS Loan eligibility is subject to a credit review by the U.S. Department of Education.

Beyond the federal borrowing limits established under the new law, institutions will also be granted new authority to further restrict how much students may borrow.  Under this provision, colleges and universities may set their own program-level loan limits that fall below the federal maximums, meaning the amount you are eligible to borrow could vary depending on where you attend and what program you are enrolled in.  Students should be aware that even if they qualify for a higher federal loan limit, their institution may cap borrowing at a lower amount based on factors such as program cost, expected debt load, or institutional policy.

To help you make sense of these changes, we’ve put together a short video explaining what’s changing under OBBBA and what it means for your graduate–level borrowing options. The video also highlights practical steps you can take now to plan for graduate school with clarity and confidence.

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.

Yes. Under OBBBA, your loan eligibility is adjusted based on enrollment level. If you drop below fulltime enrollment, your available loan amount may be prorated, even if you remained eligible for the full amount in past years.  

Start by looking at when you first borrowed loans for your current program. If your federal loans for this program were disbursed before July 1, 2026, you likely fall under the “current borrower” category. If not, you will be regarded as a “new borrower,” even if you borrowed in the past for a different program.  

Switching to a new program (even at the same school) can reset your borrowing category. That means your loan limits and eligibility rules may shift to those of a “new borrower,” even if you previously qualified as a “current borrower” in your old program.  

Beginning a new graduate or professional program after July 1, 2026, will classify you as a “new borrower,” even if you already completed a previous graduate degree.  Most students will need to explore private financing options to finance costs beyond what the new loan limits will cover.  Review the “What Is Private Financing?”  below section to help prepare.  

Students may need to consider a mix of external scholarships, assistantships, employer sponsorships, or private loans to cover gaps once the Graduate PLUS program is phased out.  

Because OBBBA uses a narrower definition of “professional programs,” students in graduate fields not on the federal list may fall under the lower graduate borrowing caps.  

Current borrowers meeting eligibility requirements are protected only for a limited time. If your program extends beyond the allowable “legacy” window, you may be subject to the new annual and lifetime loan limits.  

Students expecting to start a new program after July 1, 2026, should evaluate how OBBBA’s new limits align with total program costs, timeline to completion, and anticipated financial resources. Early planning will help avoid surprises once the new borrowing rules take effect.