Office of Student Financial Services

Grad PLUS Loans

• Grad PLUS loans will be phased out beginning on July 1, 2026; beginning on that date, new loans will not be available for new borrowers.
• There will be some continuing eligibility for existing Grad PLUS borrowers as they complete their current degree.

Graduate Unsubsidized Direct Loans

• Graduate programs:
  • Up to $20,500/year, $100,000 lifetime borrowing limit.
• Existing Unsubsidized loan borrowers can access unsubsidized loans under the current limits until completing their current degree, or for three additional years, whichever is less.

Undergraduate and Parent PLUS Loans

• There are no changes for undergraduate loans, although undergraduate loans will count towards the new lifetime limits.
• However, starting July 1, 2026, Parent PLUS loans will be capped at $20,000 per student per year, with a $65,000 lifetime limit per dependent student.
• Existing Parent PLUS borrowers who have borrowed for their students before July 1, 2026, can continue with the current limits for 3 more years or until the student’s current degree ends.

Public Service Loan Forgiveness (PSLF)

• No changes to PSLF provisions, although new limitations on eligibility have been proposed separately from the OBBB in other regulatory action.

Grad PLUS Loans for Existing Borrowers

• The current indication is that a student who borrows any Direct Loan or Grad PLUS before July 1, 2026, will remain eligible to borrow a Grad PLUS loan for the “3-year or until program completion” window so long as that student remains in the same program at the same school for which they borrowed the pre-July 1, 2026 loan.  We are awaiting further guidance from ED.

Loan Proration for Part-Timers

• The bill includes a provision to prorate loan amounts based on enrollment.
• This could mean that part-time graduate students (e.g., those enrolled less than full-time) would only be eligible for a portion of the annual loan limit.
• We are awaiting clarification from ED on how this will be applied to both graduate and undergraduate students.

New Repayment Plans

• For new loans disbursed after July 1, 2026, the bill eliminates current income-driven repayment plans (IBR, PAYE, SAVE) and replaces them with a new Repayment Assistance Program (RAP).
• Students who have borrowed loans before July 1, 2026, and will borrow a new loan after July 1, 2026, are limited to the new RAP or the standard plans for the new loan.
• RAP borrowers will not be locked into a 30-year plan. They can switch to a standard plan, which ranges from 10 to 25 years.
• Borrowers with no new loans made on or after July 1, 2026, can continue to be eligible to enroll in the current Standard, current Income Based (IBR), Graduated, and Extended repayment plans, and could also opt in to the new RAP. Current borrowers enrolled in ICR, PAYE, or SAVE plans must transition to a new repayment plan by July 1, 2028. If no selection is made by that date, they will be moved into RAP.
• More information on the new RAP is forthcoming.