The elimination of Federal Grad PLUS loans marks one of the most significant shifts in graduate and professional student financing in decades. Beginning July 1, 2026, students pursuing advanced degrees—from law and medicine to business and dentistry—will face new federal borrowing limits that could leave funding gaps of tens of thousands of dollars each year. This blog post breaks down what changed, why it matters, and how students can begin preparing for the future of graduate education financing.
What Is the One Big Beautiful Bill Act?
The “One Big Beautiful Bill Act” is a sweeping 2025 legislative package signed into law, overhauling tax policy, federal spending, and student loan programs. Among its most impactful changes for graduate and professional students are tighter federal loan limits and the elimination of the Federal Grad PLUS loan Urban Institute.
How Loan Limits Will Change (Effective July 1, 2026)
Graduate (Academic) Programs:
- Annual cap: $20,500 in Federal Direct Unsubsidized Student Loans
- Lifetime maximum: $100,000
Professional Degree Programs (e.g., law, medicine, dentistry, and other practice-focused doctoral programs):
- Annual cap: $50,000 in Federal Direct Unsubsidized Student Loans
- Lifetime maximum: $200,000
These limits apply to the Federal Direct Unsubsidized Loan program—one of the few remaining federal loan options for graduate and professional students.
Which Professional Programs Are Impacted?
Professional students face the highest borrowing ceilings, but their programs often far exceed $50,000 per year. Key fields affected include:
- Medicine (MD, DO))
- Law (JD, LLM)
- Dentistry (DDS, DMD)
- Optometry (OD)
- Veterinary Medicine (DVM)
- Psychology (professional doctoral degrees)
- Others in professional practice (e.g., professional counseling, pharmacy in some cases) Urban Institute
Urban Institute research indicates a particularly heavy impact among dentistry students—up to 56% borrowed more annually than the new cap, and 58% exceeded the new aggregate limit.
Why This Matters for Students
- High-cost programs (like med/law) may need alternative funding: With $50,000/year often not enough, many students will need private loans, scholarships, or institutional aid.
- Grad PLUS loan elimination removes a major source of flexibility and full-cost borrowing.
- Equity concerns: The caps may disproportionately affect low-income and first-generation students who lack access to private funding.Vox
Quick Comparison Table
| Program Type | Annual Borrowing Limit | Lifetime Maximum/ Aggregate Limit |
|---|---|---|
| Graduate | $20,500 | $100,000 |
| Professional | $50,000 | $200,000 |
What You Can Do Now
Explore affordability options like scholarships, assistantships, and employer tuition support—all of which don’t require repayment.
If your program costs more than federal limits allow, consider private loans carefully—assess terms, cosigner needs, and repayment plans.
Awareness of Policy Change Survey
This quick 5-question survey helps us understand how graduate and professional students are learning about the elimination of Federal Grad PLUS loans, and how confident they feel about the changes.
Your responses will be combined with those of others and shared back on our site in simple charts and summaries. By contributing, you’ll help build a clearer picture of how the student community is processing these policy changes—and ensure that your voice is represented in the broader conversation about graduate funding.
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