Grad PLUS loans ended for new graduate and professional borrowers on July 1, 2026. The 2025 budget law replaced them with higher, but capped, Direct Unsubsidized limits. If you started your program and borrowed before that date you may still be able to use Grad PLUS for a while; if you’re starting now, you’ll need to plan around the new caps.
What Changed on July 1, 2026
| Before July 1, 2026 | From July 1, 2026 | |
|---|---|---|
| Grad PLUS | Up to cost of attendance minus aid, no total cap | Not available to new borrowers |
| Direct Unsubsidized, graduate students | $20,500 a year | $20,500 a year; $100,000 total for graduate study |
| Direct Unsubsidized, professional students | $20,500 a year (more for some health programs) | $50,000 a year; $200,000 total |
| Lifetime federal cap (excluding Parent PLUS taken for a child) | None beyond program limits | $257,500 |
| Part-time students | Full annual limit | Limit reduced in proportion to enrollment |
“Professional students” are those in programs that award a professional degree as defined in federal regulations, such as medicine, dentistry, pharmacy and law. Schools can also set lower limits for a program, as long as they apply them to everyone in it.
Who Can Still Get Grad PLUS
The law’s transition rule protects students already in a program. If, as of June 30, 2026, you were enrolled in a graduate or professional program and had received a federal loan for it, the old rules (including Grad PLUS and the old unsubsidized limits) continue for the lesser of:
- three academic years, or
- the time remaining in your program.
After that, or if you switch programs, the new limits apply.
Rates and Fees (2026–27)
| Loan | Rate | Origination Fee |
|---|---|---|
| Graduate Direct Unsubsidized | 8.07% | 1.057% |
| Grad PLUS (students still eligible) | 9.07% | 4.228% |
If you can still use both, take the unsubsidized loan first. On $50,000 repaid over 10 years, the one-point rate difference costs about $3,200 more in interest on Grad PLUS, and the fees differ too:
| Loan Amount | Grad PLUS Fee | Unsubsidized Fee | Extra Fee |
|---|---|---|---|
| $10,000 | $423 | $106 | $317 |
| $20,000 | $846 | $211 | $635 |
| $50,000 | $2,114 | $529 | $1,585 |
How to Cover the Gap Without Grad PLUS
Many programs cost more than the new caps. A professional student can borrow $200,000 federally, but medical school often costs more than $50,000 a year, and a graduate student’s $20,500 a year may not cover a high-cost master’s program.
| Source | Notes |
|---|---|
| School scholarships and grants | Ask what the program offers now that Grad PLUS is gone |
| Assistantships and fellowships | Common in research master’s and PhD programs; often include a tuition waiver |
| Employer tuition assistance | Up to $5,250 a year can be tax-free |
| Service-based programs | Military, NHSC and other scholarships that pay tuition in exchange for service |
| Savings or 529 funds | Tax-free for qualified expenses |
| Private graduate loans | Credit-based; no income-driven repayment or PSLF, so borrow cautiously |
Repaying Grad PLUS and Other Graduate Loans
Grad PLUS loans are Direct Loans, so they are eligible for PSLF and income-driven repayment (unlike Parent PLUS). Your options depend on when your loans were made:
| Your loans | Repayment options |
|---|---|
| All made before July 1, 2026 | RAP or IBR; PAYE and ICR until July 1, 2028; standard, graduated, extended |
| Any federal loan made on or after July 1, 2026 | New standard plan (10–25 years by balance) or RAP, for all your Direct Loans |
The second row matters for continuing students. Under the 2025 law, once you receive any Direct Loan made on or after July 1, 2026, you are limited to the new standard plan or RAP for all your Direct Loans, including older ones. Compare RAP and IBR on your existing loans before you borrow again.
PSLF and Graduate Borrowers
| Your Situation | Common Strategy |
|---|---|
| Public service employer (government, nonprofit) | Income-driven plan, certify employment every year, pursue PSLF |
| Medical residency at a nonprofit hospital | Low income-driven payments during residency count toward PSLF |
| High income, moderate debt | Repay on a standard plan or refinance (you lose PSLF and RAP if you refinance) |
| High income, very high debt, private sector | Income-driven plan while income is low, then reassess |
On RAP, a resident earning $65,000 pays 6% of income, about $325 a month; if that is less than the interest, the unpaid interest is waived, so the balance doesn’t balloon during training.
Applying (If You’re Still Eligible)
- File the FAFSA for the academic year
- Accept your Direct Unsubsidized loans first
- Apply for Grad PLUS at StudentAid.gov and complete the credit check
- Sign the PLUS Master Promissory Note and complete any required counseling
- Funds go to your school each term
Related Guides
- Student Loan Changes in 2026
- Income-Driven Repayment Plans
- How to Apply for PSLF
- Private Student Loans
- Average Student Loan Debt
Part of the student loan guide.
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