One of the most notable changes is the elimination of the Graduate PLUS Loan. Beginning July 1, 2026, Graduate PLUS Loans will be unavailable for new borrowers. For students already enrolled in a graduate program, the Graduate PLUS Loan program will remain available for three years after July 1, 2026, or until the student completes the program, whichever comes first. This ensures that students currently enrolled can finish their program.
Going forward, graduate students will be able to borrow Direct Unsubsidized Loans up to the current annual limit of $20,500. The aggregate limit, however, is changing from the current $138,500 to $100,000. This limit does not include any federal student loans that may have already been borrowed for undergraduate studies.
There is now a new Direct Unsubsidized Loan limit for professional students.1 Previously, loan limits were for graduate and professional students as a group. The OBBBA sets a professional student annual loan limit of $50,000 and new aggregate limit of $200,000.
The Parent PLUS Loan, which parents can borrow for their undergraduate dependent students, has a new annual limit of $20,000 and an aggregate limit of $65,000 per dependent student. Under the legacy provisions of the OBBBA, parents who took out a Direct Parent PLUS Loan before July 1, 2026, may continue borrowing up to the student’s cost of attendance for up to three additional academic years, or until the student completes the program, whichever occurs first, subject to the existing loan limits.
Additional loan-limit provisions include a $257,500 lifetime limit for students (excluding Parent PLUS loans), institutional requirements to amend annual loan limits for students enrolled less than full-time, and a provision that enables schools to lower loan limits by program of study.
Finally, the OBBBA makes major changes to the repayment plans for federal Direct Loans. Repayment options will be reduced to two payment plans: a multilevel Standard Repayment plan and a new Income-Driven Repayment plan, called the Repayment Assistance Plan (RAP).
The impact of these changes will be significant for many families, and it is widely expected to drive more students to pursue private education loan options. Private education loans can sometimes offer more competitive interest rates than Parent PLUS Loans, and many lenders also charge no origination fees. However, it is important for families to carefully research lenders, because interest rates, repayment terms, and incentives can vary significantly. Additional information on financial aid changes as a result of the OBBBA can be found at StudentAid.gov.
1 The Department of Education’s current guidance on who will be defined as professional students are as follows: Pharmacy, Dentistry, Veterinary Medicine, Chiropractic, Law, Medicine, Optometry, Osteopathic Medicine, Podiatry, Theology, and Clinical Psychology. This definition is still available for public comment and could change based on public comment. It is expected to be finalized by July 1, 2026.
Diona Brown is director, PA School Services, with the Pennsylvania Higher Education Assistance Agency (PHEAA). She can be reached at diona.brown@pheaa.org.
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