The Grad PLUS loan let a graduate or professional student borrow up to the full cost of their program, with no annual limit and no aggregate limit. For a medical, dental, or law student, it was often the loan that made the whole thing possible. As of July 1, 2026, it no longer exists for new borrowers. A graduate student starting now borrows from the Direct Unsubsidized loan, and that loan has a ceiling.
There is one exception. A student who was enrolled on June 30, 2026 and already had any federal Direct Loan for that program, not only a Grad PLUS loan, keeps the old limits while they stay in the same program, for up to three more academic years or until the program ends if that comes sooner. Everyone else, and every new program, works under the new rules starting now.
The new ceiling on graduate borrowing
The Direct Unsubsidized loan now carries firm limits for graduate and professional students. “Professional” is a fixed list of 11 fields: medicine, osteopathic medicine, dentistry, pharmacy, veterinary medicine, optometry, podiatry, chiropractic, law, theology and clinical psychology. Nursing, physician assistant and physical therapy programs get the graduate limits, and graduate and professional borrowing together cannot exceed $200,000.
| Student | Per year | Total for the program |
|---|---|---|
| Graduate (non-professional) | $20,500 | $100,000 |
| Professional (the 11 fields above) | $50,000 | $200,000 |
The number that matters is not the cap itself, it is the cap next to the bill. A graduate program that costs $35,000 a year now has a $20,500 federal loan behind it and a $14,500 gap. A medical program at $80,000 a year has a $50,000 federal loan and a $30,000 gap, every year, for four years. Grad PLUS used to fill that gap. Nothing federal fills it now.
What fills the gap, and what it costs you to use it
The gap above the federal cap has to be covered by a private loan, a payment plan, savings, or a less expensive program. A private graduate loan is the one most students reach for, and it is worth being clear-eyed about the trade. A private loan has no income-driven repayment, no forgiveness path, no pause when income drops, and it is priced on credit rather than on a fixed federal rate. The federal portion of the debt carries a floor of protections that the private portion does not.
That gap between the two kinds of debt is the real story of this change. Consider a graduate who borrows the full $100,000 of federal Direct Unsubsidized at 8.07%, the 2026-27 graduate rate, earning $75,000, single, in Texas. On the income-driven RAP plan, the federal payment is around $438 a month. On the tiered Standard plan, which sets a $100,000 balance on a 25-year term, it is around $776 a month. Either way, the federal loan bends to what the borrower earns, or at least amortizes on a known schedule. A private loan stacked on top of it does neither. The more of a program that sits above the federal cap, the more of the borrower’s future is on terms that do not flex.
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What this changes about choosing a program
- The federal-only price of a program is now a real number. Take the program’s cost, subtract the federal cap, and what is left is the part you fund on private terms. That number belongs in the decision next to the school’s name.
- Cost-of-living matters more than it did. With a hard cap on federal borrowing, a lower cost of attendance leaves a smaller private gap. The same degree from a less expensive program is now a materially different debt.
- The federal loan is the one to max first and protect. It is the part of the debt that carries income-driven repayment and forgiveness. Borrow it to the cap before you touch private money, and keep it federal.
Grad PLUS closing is not the end of graduate borrowing. It is the end of borrowing the whole cost on federal terms. The students who plan the gap now, program by program, will carry less of their future on debt that cannot flex.
Sources: the elimination of Grad PLUS and the graduate and professional loan limits are from the One Big Beautiful Bill Act, effective for loans made on or after July 1, 2026, as set out in Pub. L. 119-21 (the One Big Beautiful Bill Act, which the Department of Education now calls the Working Families Tax Cuts Act), the Department’s final rule of May 1, 2026, and Federal Student Aid’s loan limits FAQ of May 20, 2026. Repayment figures were computed by the Finology engine on September 30, 2026 for loans made on or after July 1, 2026 and are illustrative for the scenario stated. This is educational information, not individual financial advice.
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