What changed on July 1, 2026
P.L. 119-21, the 2025 law known as the One Big Beautiful Bill Act, ended Grad PLUS for new borrowers. The rule is now in the federal regulations: "Beginning on July 1, 2026, a graduate student or professional student may not borrow a Direct PLUS Loan" (34 CFR 685.200(b)(2)(i)).
Before that date, Grad PLUS had no fixed dollar cap. A graduate or professional student could borrow up to the cost of attendance minus other aid, each year (34 CFR 685.203(f)(1)). For periods of enrollment beginning on or after July 1, 2026, federal borrowing for graduate school is capped instead:
| A year | In total | |
|---|---|---|
| Graduate students (Direct Unsubsidized) | $20,500 | $100,000 |
| Professional students (Direct Unsubsidized) | $50,000 | $200,000 |
| Lifetime maximum, all federal student loans | $257,500 |
The lifetime maximum counts every federal loan a student borrows, undergraduate included, but not Parent PLUS loans they took out as a parent. Loans for less-than-full-time study are prorated, and a school can set lower limits for a program. The 2026 loan limits calculator shows the gap for your cost of attendance.
Who keeps Grad PLUS
The regulation keeps Grad PLUS for a student who meets both conditions (34 CFR 685.200(b)(2)(ii)):
- they were enrolled in a program of study on June 30, 2026, and
- a Direct Loan was made for that program before July 1, 2026.
The exception lasts for the student's expected time to credential. The Congressional Research Service describes this as three academic years or the time remaining in the program, whichever is shorter. During it, the old limits apply, so Grad PLUS can still cover the cost of attendance minus other aid.
It ends early if the student withdraws or otherwise stops being enrolled in that program (34 CFR 685.200(b)(3)). A student starting a new program on or after July 1, 2026 can't use it, even one who borrowed for an earlier degree.
For example, a law student who started in fall 2025 and borrowed for the first year keeps Grad PLUS for the two remaining years. A student who started a five-year doctoral program in fall 2025 keeps it for three academic years, the cap, and then borrows under the new limits.
What a Grad PLUS loan is
For students who keep it, Grad PLUS works as before:
- Who: graduate or professional students enrolled at least half time in a school in the Direct Loan program, after the school has determined their Direct Unsubsidized eligibility.
- Credit check: no adverse credit history. In the rule, that means no debts above a set amount that are 90 or more days delinquent, or that were in collection or charged off, in the last two years. It also means no default determination, bankruptcy discharge, foreclosure, repossession, tax lien, wage garnishment or federal student loan write-off in the last five years. A student with an adverse history can still borrow with an endorser who doesn't have one, or by documenting extenuating circumstances, and must then complete PLUS counseling. Having no credit history doesn't count against you (34 CFR 685.200(b)(1)(v), (c)(2)(viii)).
- Rate: 9.07% fixed for loans first disbursed from July 1, 2026 through June 30, 2027. Graduate Direct Unsubsidized loans are 8.07%.
Repaying Grad PLUS loans
Grad PLUS loans are Direct Loans, so the federal repayment plans cover them:
- RAP. Direct PLUS loans made to graduate and professional students are eligible. The RAP calculator shows the payment from your income, whatever the balance.
- IBR and the older fixed plans. Grad PLUS loans made before July 1, 2026 can also use IBR and the 10-year Standard, graduated and extended plans, but only while you have no Direct Loan made on or after that date. The IBR calculator shows that payment.
- PSLF. Payments under RAP, IBR or the 10-year Standard plan count toward Public Service Loan Forgiveness. See RAP and PSLF.
A new loan changes all of this. Any Direct Loan made on or after July 1, 2026 limits all your loans to RAP or the Tiered Standard plan. That includes a Grad PLUS loan taken under the exception and a Direct Consolidation Loan. A student who keeps Grad PLUS and borrows again gives up IBR and the older fixed plans for the loans they already have. If IBR matters to you, compare the plans on the RAP vs IBR calculator before borrowing again. The calculator's "loans made on or after July 1, 2026" option shows what changes.
If the new caps leave a gap
When the cost of attendance minus other aid is more than the new federal limits, the rest has to come from savings, work, the school or private loans. Private loans don't qualify for RAP, IBR or Public Service Loan Forgiveness, and their rates and terms depend on the lender and your credit. The loan limits calculator shows how much of a year's need federal loans can cover.
Common questions
Can I still get a Grad PLUS loan?
Only if, on June 30, 2026, you were enrolled in your graduate or professional program and a Direct Loan had already been made for that program. Then you keep Grad PLUS for your expected time to credential: three academic years or the time left in your program, whichever is shorter. Leaving the program ends it.
What is a Grad PLUS loan?
A federal Direct PLUS Loan for graduate or professional students enrolled at least half time. It comes after the student's Direct Unsubsidized eligibility, it requires no adverse credit history (or an endorser, or documented extenuating circumstances, with PLUS counseling), and it could cover the cost of attendance minus other aid.
What is the Grad PLUS interest rate for 2026-27?
9.07%, fixed for the life of the loan, for Direct PLUS loans first disbursed from July 1, 2026 through June 30, 2027. Graduate Direct Unsubsidized loans are 8.07%.
What replaced Grad PLUS?
Higher limits on Direct Unsubsidized loans for professional students, $50,000 a year and $200,000 in total, and a $257,500 lifetime maximum. Graduate students keep $20,500 a year, with a $100,000 total. Anything above that has to come from savings, the school or private loans, which can't use RAP or PSLF.
Can Grad PLUS loans be repaid under RAP?
Yes. Direct PLUS loans made to graduate and professional students are eligible for RAP. Grad PLUS loans made before July 1, 2026 can also use IBR and the older fixed plans, as long as you have no Direct Loan made on or after that date.
Does borrowing again after July 1, 2026 change my repayment options?
Yes. Any Direct Loan made on or after July 1, 2026, including a Grad PLUS loan under the exception, limits all your loans to RAP or the Tiered Standard plan. IBR and the older fixed plans close for your earlier loans too.