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Grad PLUS Is Gone: How Grad Students Pay Now

Forgiveness Watch · Published November 1, 2026 · Rules checked October 31, 2026 · 8 min read

Since July 1, 2026, new graduate and professional students can't take out Grad PLUS loans, and federal borrowing is capped for the first time in two decades. If you're starting or continuing grad school, here's what you can still borrow, who keeps the old rules, and how to cover the gap without walking into a worse deal.

Quick answer
  • New grad borrowers: up to $20,500 a year and $100,000 total in Direct Unsubsidized Loans.
  • Professional programs (on ED's interim list, which is still in court): up to $50,000 a year and $200,000 total.
  • Lifetime federal cap: $257,500 across undergrad and grad (Parent PLUS not included).
  • Already borrowing for your current program before July 1, 2026? You may keep the old limits, including Grad PLUS, for up to three years or until you finish, if you stay in the same program.
  • Repayment: any new loan made on or after July 1, 2026 puts all your Direct Loans on RAP or Tiered Standard once it enters repayment.

The new federal limits

Student typeAnnual limitAggregate limit
Graduate (most master's and doctoral programs)$20,500$100,000
Professional (programs on ED's interim list)$50,000$200,000
Lifetime, all federal student loans (excluding Parent PLUS)—$257,500

Undergraduate loans don't have new caps, but they count toward the $257,500 lifetime limit. Loan eligibility is now also prorated for part-time enrollment: borrowing shrinks in proportion to the credits you take instead of being all-or-nothing at half-time. Schools can also set their own lower limits for specific programs.

Who keeps the old rules

ED's “interim exception” protects students who were already mid-program. You generally qualify if:

If you qualify, you can keep borrowing under the old limits for up to three academic years or until you finish, whichever comes first. ED's guidance says the new limits apply no later than the 2029–30 award year. Transferring, changing programs, withdrawing or finishing ends the exception.

Grandfathered limits don't protect your repayment options

The interim exception covers how much you can borrow, not how you repay. Any federal loan first disbursed on or after July 1, 2026, including a grandfathered Grad PLUS loan, makes you a “new borrower.” Once that loan enters repayment, all of your Direct Loans, including undergrad loans from years ago, must use RAP or Tiered Standard. IBR, PAYE and ICR are no longer options for you.

The professional degree list is still in court

Whether you get the $50,000 professional cap or the $20,500 graduate cap depends on whether your program is on ED's list. That list has changed several times since the rule was finalized in May 2026:

As of November 2026, the list also includes medicine (MD and DO), dentistry, pharmacy (PharmD), optometry, podiatry, veterinary medicine, chiropractic, law and clinical psychology (Psy.D.). ED calls the list interim and says it will keep defending its narrower definition, so it may change again. Ask your financial aid office which level they're certifying you at, and why.

How to cover the gap

If your cost of attendance is more than the new caps, work through these roughly in order. The goal is to use money you won't have to repay, or federal loans with federal protections, before anything else.

  1. File the FAFSA and ask the aid office what's left. Ask specifically about institutional grants, tuition remission and whether the school has changed its own aid because of the new caps.
  2. Look for funded positions. Teaching and research assistantships and fellowships often include tuition waivers and a stipend.
  3. Ask about employer help. Employers can pay up to $5,250 a year in education assistance, including tuition or student loan payments, tax-free to you. OBBBA made that rule permanent, with the limit indexed to inflation after 2026.
  4. Look at service-based programs. Some health professions have federal scholarships or loan repayment in exchange for service. See forgiveness for doctors and healthcare workers and our nurses guide.
  5. Cut cost of attendance. A cheaper program, living costs or part-time study can matter more than any loan.
  6. Private loans last. If you need them, compare at least three lenders and read the hardship terms.

What you give up with private loans

ProtectionFederal Direct LoansPrivate loans
Income-driven payment (RAP)YesNo
PSLF eligibilityYes, on RAPNo
Interest waiver when payment is lowYes, on RAPNo
Death and disability dischargeYesDepends on the lender
Cosigner usually neededNoOften

If you're planning on PSLF, keep that in mind. Every dollar borrowed privately is a dollar PSLF can never forgive.

Repaying under the new system

As a new borrower, you'll choose between RAP (income-driven, PSLF-eligible, 30-year forgiveness) and Tiered Standard (fixed payments over 10 to 25 years, not PSLF-eligible). If public service is a possibility, RAP is the only option that keeps PSLF open. See how RAP payments are calculated and estimate yours with the IDR Payment Estimator.

If you still have older loans on IBR and you're deciding whether to borrow again, the trade-off is real: new federal loans move everything to RAP. Before you borrow, run both scenarios. In some cases, a smaller new federal loan plus savings beats losing IBR on a large existing balance. In others, RAP's interest waiver makes the switch harmless. Our RAP vs. IBR comparison lays out the differences.

Never pay for student loan help

Expect aggressive “Grad PLUS replacement” marketing and refinance pitches. Never give your FSA ID to a lender or “consultant.” Every federal application, from IDR and consolidation to PSLF, discharges and default resolution, is free at StudentAid.gov or through your servicer. Anyone who charges a fee, asks for your FSA ID password, or promises guaranteed forgiveness is a red flag. See how to spot student loan scams.

What to do this week

  • Ask your financial aid office, in writing, whether you qualify for the interim exception and whether you're coded as graduate or professional.
  • Add up your total federal borrowing so far (StudentAid.gov, under My Aid) to see how close you are to the $100,000, $200,000 or $257,500 limits.
  • Ask about assistantships, fellowships and employer tuition benefits before considering private loans.
  • If you have older loans on IBR, compare IBR with RAP using the estimator before accepting a new federal loan.

FAQ

Is Grad PLUS completely gone?

For new borrowers, yes, as of July 1, 2026. Students who were already enrolled and had already borrowed for their program before then can keep borrowing under the old rules, including Grad PLUS, for up to three years or until they finish, if they stay in the same program.

How much can graduate students borrow now?

Up to $20,500 a year and $100,000 total for graduate programs, or $50,000 a year and $200,000 total for professional programs on ED's interim list. The lifetime federal limit is $257,500, not counting Parent PLUS.

Is nursing a professional degree for loan limits?

On ED's interim list, as of November 2026, yes for MSN, DNP and nurse anesthesia programs, after a June 2026 court order. The list is still being litigated and could change.

If I'm grandfathered, can I still use IBR?

Not after your new loan enters repayment. Any loan first disbursed on or after July 1, 2026 makes you a new borrower, and all your Direct Loans must use RAP or Tiered Standard.

Should I use private loans to cover the gap?

Only after grants, assistantships, employer help and federal loans. Private loans have no RAP, no PSLF and no interest waiver, and disability or death discharge depends on the lender.

Sources

Checked October 31, 2026. Rules are changing quickly; when an official notice and this page disagree, the official notice wins.

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