Federal Updates
Federal Student Loan Changes Effective July 1, 2026
Beginning July 1, 2026, federal legislation will significantly change how students and families can borrow federal student loans. These changes primarily affect Graduate PLUS Loans and Parent PLUS Loans.
Key Changes at a Glance
- Graduate PLUS Loans will no longer be available to new borrowers without prior federal loan history.
- Parent PLUS Loans will continue but with new annual and lifetime limits for non-legacy borrowers.
- Borrowers with prior federal loan borrowing history may qualify under a Legacy Provision, allowing temporary continuation of current rules.
What Is the Legacy Provision?
The Legacy Provision applies to students or parents who borrowed a federal student loan before July 1, 2026. Eligibility is based on borrowing history, not enrollment status.
Borrowers without legacy status will have reduced federal loan options after July 1, 2026.
Graduate & Law Students: Frequently Asked Questions
What is changing on July 1, 2026?
The Graduate PLUS Loan program is being phased out. Starting with the 2026–2027 academic year:
- Only students who borrowed a federal loan before July 1, 2026 and are continuing in the same program may continue using Graduate PLUS Loans under the Legacy Provision.
- Students without prior federal loan history will no longer be eligible for Graduate PLUS Loans.
New Federal Graduate Loan Limits
- Professional programs (Law School):
- $50,000 per year
- $200,000 lifetime maximum
- All other graduate programs:
- $20,500 per year
- $100,000 lifetime maximum
Students already enrolled and borrowing federal loans may keep current limits for up to three years or until program completion, whichever comes first.
What counts as prior federal loan borrowing?
Eligible loans include:
- Direct Subsidized Loans
- Direct Unsubsidized Loans
- Parent PLUS or Graduate PLUS Loans
Private loans do not count.
Will I still be able to finance graduate school?
Yes—but some students may need to rely more on private education loans.
How long can legacy borrowers continue Graduate PLUS loans?
Eligible borrowers may continue borrowing through June 30, 2029, or until their program ends.
Parents: Frequently Asked Questions About Parent PLUS Loans
Are Parent PLUS loans being eliminated?
No. Parent PLUS loans will continue, but new limits apply to non-legacy borrowers.
New Parent PLUS Limits (Non-Legacy Borrowers)
- $20,000 per student per year
- $65,000 lifetime maximum per student
Limits are per student, not per parent or household.
Who is considered a legacy Parent PLUS borrower?
A parent is a legacy borrower if either:
- Their student borrowed a federal Direct Loan before July 1, 2026, or
- The parent borrowed a Parent PLUS loan before July 1, 2026
How long can legacy parents continue borrowing?
Legacy borrowers may continue under current rules for up to three years or until the student completes their academic program, whichever comes first.
What can cause loss of legacy status?
Legacy eligibility is lost if the student:
- Takes a fall or spring semester off
- Withdraws during a fall or spring term
(Summer enrollment is not required.)
Can both parents borrow $20,000 each year?
No. The annual and lifetime limits apply per student, regardless of how many parents borrow.
NEW: Loan Amounts Are Prorated for Part‑Time Enrollment
Starting in 2026–27, annual federal loan limits must be prorated based on enrollment level.
- Previously, a student enrolled half‑time could often receive the full annual loan limit.
- Under OBBBA, loan eligibility must now be reduced proportionally for students enrolled less than full‑time.
- This applies to all Direct Loans (undergraduate, graduate, and professional).
What Should You Do Next?
Students and families should:
- Review federal loan history at StudentAid.gov
- Plan ahead for future borrowing needs
- Contact a Financial Aid Counselor to discuss eligibility and alternatives
Federal guidance may continue to evolve. This information reflects what is known at this time and will be updated as new details become available.
Updated: 02/04/2026