Graduate Students
What we know
Graduate PLUS loans
- Graduate PLUS loans will be eliminated for new borrowers beginning on July 1, 2026;
beginning on that date, new loans will not be available for new borrowers.
- There will be some continuing eligibility for existing Graduate PLUS borrowers as
they complete their current programs. This will be limited by remaining annual cost
of attendance and new part time loan proration rules.
New graduate unsubsidized direct loan limits (effective July 1, 2026)
- Annual limit: Remains $20,500
- Aggregate limit: Capped at $100,000
- These limits apply only to graduate borrowing and do not include previous undergraduate
loans.
Existing Unsubsidized loan borrowers can access unsubsidized loans under the current
limits until completing their current program or for three additional years, whichever
is less.
Legacy provision
You may continue to borrow under the current rules (including Graduate PLUS Loans up to the Cost of Attendance) for up to three additional years if you meet BOTH of the following criteria:
- You are enrolled in the same credentialed program in 2026–27 that you were enrolled in prior to July 1, 2026.
- You borrowed a federal student loan (Subsidized, Unsubsidized, or Graduate PLUS) for
that specific program before.
If you change programs or start a new degree after July 1, 2026, you will be subject
to the new limits.
Loan proraation for part-time students
- The bill includes a provision to prorate loan amounts based on enrollment.
- This means that part-time graduate students (e.g., those enrolled less than full-time,
9 hours for a graduate) are only eligible for a portion of the annual loan limit.
- Example: enrolled 6 hours / 9 hours full time = 66.6666% x $10,250 semester limit
= $6833
|
Parents of Dependent Undergraduate Students
What we know
Undergraduate Limits and Parent PLUS Loans
- There are no changes for undergraduate loans, although undergraduate loans will count
towards the new lifetime limits.
- The new federal lifetime aggregate student loan limit is $257,500 for all combined
federal student loans across undergraduate and graduate studies.
- As of July 1, 2026, Parent PLUS loans will be capped at $20,000 per student per year,
with a $65,000 lifetime limit per dependent student. Please borrow wisely as this
means you will run out of parent PLUS loan eligibility for your 4th year if you take
the maximum amount in the 1st 3 years.
- Existing Parent PLUS borrowers who have borrowed for their students before July 1,
2026, can continue with the current limits for 3 more years or until the student’s
program ends.
Legacy Provision for Parents of Currently Enrolled Students
Parents may continue to borrow under the current rules (up to the full Cost of Attendance)
for up to three additional years if:
- The student they are borrowing for is enrolled in the same program they were attending
prior to July 1, 2026.
- The parent borrowed a Parent PLUS loan for that student before July 1, 2026.
|
How to Prepare
Here are steps you can take now:
- Check your loan history: Log in to StudentAid.gov to view your current total loan balance.
- Understand your status: Determine if you will likely qualify for the Legacy Provision. If you are currently
enrolled and have borrowed federal loans, you generally will.
- Plan for the gap: If you anticipate your costs will exceed the new federal limits (especially for new
graduate students or parents), begin researching private student loan options or preparing
personal savings.
We are here to help you. Please reach out to us if you have any questions.
|
Repayment
Public Service Loan Forgiveness (PSLF)
No changes to PSLF provisions, although new limitations on eligibility have been proposed
separately from the OBBB in other regulatory action.
New repayment plans
- For new loans disbursed after July 1, 2026, the bill eliminates current income-driven
repayment plans (IBR, PAYE, SAVE) and replaces them with a new Repayment Assistance
Program (RAP).
- Students who have borrowed loans before July 1, 2026, and will borrow a new loan after
July 1, 2026, are limited to the new RAP or the standard plans for the new loan.
- RAP borrowers will not be locked into a 30-year plan. They can switch to a standard
plan, which ranges from 10 to 25 years.
- Borrowers with no new loans made on or after July 1, 2026, can continue to be eligible
to enroll in the current Standard, current Income Based (IBR), Graduated, and Extended
repayment plans, and could also opt in to the new RAP. Current borrowers enrolled
in ICR, PAYE, or SAVE plans must transition to a new repayment plan by July 1, 2028.
If no selection is made by that date, they will be moved into RAP.
More information on the new RAP is forthcoming.
|
Loan Limits for Part-time Students
The OBBB reduces the amount of a loan that a student may borrow for an academic year
if the student is enrolled in a program of study on less than a full-time basis during
that academic year. This reduction in the annual loan limit will be made in direct
proportion to the degree to which the student is not enrolled full-time, rounded to
the nearest percentage point.
Students must enroll at least half-time (6 credit hours for both undergraduate and
graduate students) in order to receive a Federal Direct Loan (Subsidized and Unsubsidized
Loans, and PLUS Loans) but must be enrolled full-time (12 credit hours as an undergraduate
and 9 hours as a graduate student) both semesters in order for the loan to not be
subject to new schedule of reduction rules.
Loans will be prorated at the time of disbursement (when financial aid is applied
to the student account) if the student is not enrolled full-time at that time, and/or
if hours are reduced during the add/drop period (the first 10 days of a full-semester
course).
(number of credit hours enrolled for academic year) divided by (number of credit hours
considered full time for that academic year for the program of study) x 100 = reduced
annual loan limit percentage.
Example: 9/12 hours for Fall = 75% x Fall 1st year loan $2750 = $2062.
The Department is currently developing the schedule of reductions that is required
by the OBBB and will submit it for public comment later this year. Once public comments
are received and reviewed, the revised schedule of reductions will be issued by the
Secretary and used to determine the reduction in the annual loan limits for students
who are enrolled less than full-time for subsequent academic years (2026-27 and beyond).
Institutions will be required to use this schedule of reductions when reducing the
annual loan limits for all students who are not enrolled full-time in those academic
years.
|
Federal Pell Grants
Pell Grants & Full Scholarships:
- Students whose Cost of Attendance (COA) is fully covered by non-federal aid will no
longer be eligible for a Federal Pell Grant. Ends the previous allowance for Pell
Grants to exceed COA when combined with other aid.
- Example: A Pell-eligible student with a scholarship covering the full Cost of Attendance
will no longer receive both the scholarship and the Pell Grant.
Pell Grants and High Student Aid Index (SAI):
- Students with an SAI greater than twice the maximum Pell Grant amount will be ineligible
for any Pell Grant.
- Example: If the max Pell Grant is $7,395, students with SAI over 14,790 will not qualify.
|
Additional Resources
For additional resources published by Federal Student Aid (FSA), please visit:
|
All Rights Reserved
