Key Points
- Starting July 1, 2026, the federal Grad PLUS program closes to new borrowers, and graduate borrowing is capped at $20,500 a year and $100,000 total. Professional students, such as future doctors, dentists, and lawyers, can borrow $50,000 a year and $200,000 total.
- A new overall federal borrowing ceiling of $257,500, which includes undergraduate debt, means many students will reach a hard limit that federal aid alone won’t cover.
- Private student loans, including Abe® can help close the gap between the federal caps and the real cost of a graduate or professional degree.
The way students pay for graduate school is about to change. Starting July 1, 2026, the federal government will stop offering Grad PLUS loans to new borrowers and will set new caps on how much graduate and professional students can borrow each year. For people heading into master’s, doctoral, medical, dental, and law programs, federal aid will no longer stretch to cover the full price of a degree.
In partnership with Monogram LLC, which created Abe® student loans, let’s break down what’s changing and how graduate students can plan for the gap. Get a quote here >>
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What’s Ending: The Grad PLUS Loan
Until now, the federal Grad PLUS loan let graduate and professional students borrow up to the full cost of attendance, no matter how expensive the program. Beginning July 1, 2026, that program closes to new borrowers under the One Big Beautiful Bill Act (OBBBA).
However, there is a transition rule. If you already borrowed a Grad PLUS loan before July 1, 2026, and you stay continuously enrolled in your program, you can keep using Grad PLUS for up to three more years or until you finish your program, whichever comes first.
Students who start fresh after that date will not have access to the program at all.
The New Borrowing Caps
In place of unlimited Grad PLUS borrowing, the law sets annual and lifetime limits on the federal unsubsidized loans graduate and professional students can take out:
Borrower Type | Annual Limit | Lifetime Limit |
|---|---|---|
Graduate degree (master’s, doctoral) | $20,500 | $100,000 |
Professional degree (medicine, law, and similar) | $50,000 | $200,000 |
Overall federal cap (includes undergraduate debt) | Cell | $257,500 |
For perspective, the previous lifetime limit for graduate and professional borrowing was $138,500. The new structure raises the ceiling for some professional programs but removes the safety valve that Grad PLUS provided when a degree cost more than the cap allowed.
Part-time students will see their limits reduced in proportion to their enrollment.
What This Means for Your Family
The household impact lands hardest on students in high-cost programs. Many medical and dental schools carry a total cost of attendance well above $200,000, and four years at a private medical school can exceed $300,000 once living expenses are included.
A professional student who reaches the $200,000 federal lifetime limit could still face a meaningful shortfall, and a graduate student capped at $100,000 may run out of federal aid before the second year of a pricey program.
Families now have to plan earlier. That means comparing program costs against the federal caps before enrolling, building any savings or assistantship income into the budget, and knowing in advance how a funding gap will be covered. The era of borrowing the full cost from the government in one place is over for new students.
Where Private Loans Fit In
Once federal options are maxed out, a private student loan is the main way to bridge the difference. Abe® is built for exactly this situation, offering private student loans for graduate and professional students who need more than the new federal caps allow. In fact, Abe’s loan limits recently increased in order to help many borrowers affected by the Grad PLUS phaseout to continue their educational journey. Borrowers can compare fixed and variable rate options and apply with a creditworthy cosigner to strengthen the application.
Because private loan terms vary by lender and by borrower credit, look at the interest rate, repayment options while in school, and any fees before signing.
Compare your graduate borrowing options with Abe®. Get a quote here >>. Also, check out Abe’s Graduate Scholarship Sweepstakes, open for entries until July 31, 2026. One lucky winner will receive $5,000 ‡ for educational expenses. Click this link to enter and see the sweepstakes rules here.
Action Steps
- Confirm whether you are grandfathered. If you borrowed Grad PLUS before July 1, 2026, and stay enrolled, you may keep limited access for up to three years.
- Add up your full program cost and subtract the new federal caps to see your likely gap.
- Maximize federal unsubsidized loans first, then assistantships, scholarships, and savings.
- Borrow only what you need, and check the repayment terms that apply while you are still in school.
- Check out Abe® to see how private student loans can fit in.
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‡ NO PURCHASE NECESSARY. Open to legal residents of the 50 U.S./D.C., age 18+ who are currently a student or parent of a student enrolled in a graduate program at an Eligible Institution. Void where prohibited. Ends 07/31/26. Click for Official Rules.
Editor: Colin Graves
Robert Farrington is the founder of The College Investor and is widely recognized as one of the nation’s leading voices on student loan debt and saving for college. He holds an MBA from UC San Diego Rady School of Management and has spent over 15 years researching, writing, and advising on student loans, 529 plans, financial aid programs, and saving and investing for young professionals.
Robert has been featured in the The New York Times, The Wall Street Journal, The Washington Post, NBC News, and Forbes, where he has been a regular personal finance contributor for over a decade. His work combines both professional expertise and personal experience – he successfully navigated his own student loan repayment journey and has helped thousands of readers do the same.
He is committed to making the intersection of personal finance and education transparent and accessible. You can learn more about Robert on the About Page or on his personal site RobertFarrington.com.