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Short answer: on July 1, 2026, several changes to federal student loans took effect under the One Big Beautiful Bill Act, which was signed on July 4, 2025. Grad PLUS loans ended for new borrowers, new lifetime and Parent PLUS limits began, and loans taken out on or after July 1, 2026 can only be repaid on a standard plan or on a new income-based plan called the Repayment Assistance Plan, or RAP. Undergraduate loan limits did not change.
Rules and legal challenges are still developing, so confirm anything that affects your own loans on StudentAid.gov or with your school's financial aid office. We explain below how we checked this guide.
What changed on July 1, 2026
| Change | Who it affects | What it means |
|---|---|---|
| Grad PLUS ended for new borrowers | Graduate and professional students | New students cannot take a Grad PLUS loan. Students who borrowed a federal loan for their program before July 1, 2026 may keep borrowing Grad PLUS for up to three academic years or the rest of the program, whichever is shorter. |
| New lifetime limit | Anyone borrowing federal Direct Loans | Aid offices report a lifetime limit of $257,500 across federal Direct Loans, excluding Parent PLUS. Undergraduate loans count toward it, and so do loans that have been paid off. |
| New limits on graduate Unsubsidized Loans | Graduate and professional students | New annual and aggregate limits apply. Check the amounts for your program on StudentAid.gov. |
| Parent PLUS caps | Parents borrowing for undergraduates | For loans borrowed on or after July 1, 2026, aid offices report $20,000 a year and $65,000 in total per student. Parents who borrowed for the same student earlier may be able to continue under the old limits for a transition period. |
| Fewer repayment plans for new loans | Borrowers of new loans from July 1, 2026 | A standard repayment plan or RAP only. |
What did not change
Undergraduate loan limits are the same as before. If you are an undergraduate borrowing in your own name, the main effect is that your loans count toward the new lifetime limit, which matters mostly if you later borrow for graduate school.
The Repayment Assistance Plan
RAP is the new income-based plan. University aid offices, drawing on national aid administrators' summaries, describe it this way: payments are based on income, any balance is forgiven after 30 years of repayment, and it is a qualifying plan for Public Service Loan Forgiveness. We have not included the payment formula, because we could not confirm it from an official page, so use the StudentAid.gov repayment plans page for the amounts.
The rules for who can use which plan depend on when your loans were taken out:
If you borrow a new federal Direct Loan on or after July 1, 2026, you can choose only between a standard repayment plan and RAP.
If you do not borrow a new Direct Loan on or after that date, you may keep your current repayment options, and you may also be able to use RAP.
All your federal loans must be repaid on the same plan, according to national aid administrators. If you have loans from before and after July 1, 2026, that affects your choices, so ask your servicer.
If you are a graduate or professional student
With Grad PLUS gone for new borrowers, federal borrowing for graduate school is limited by the new Unsubsidized Loan limits and the lifetime cap. Which programs count as professional degrees, with higher limits, has been the subject of legal challenges, and a federal court ruling has temporarily affected the position, according to one university aid office. Ask your program's financial aid office how it is treated now.
If federal loans do not cover your costs, private loans are a separate market. Their terms depend on the lender and your credit, and they are not covered by federal programs such as Public Service Loan Forgiveness. Compare the total cost, not just the monthly payment, before you borrow.
If you are a parent
The new Parent PLUS caps limit how much you can borrow for each dependent undergraduate. If you borrowed for your child before July 1, 2026, ask the school how long the previous limits apply to you. Because limits apply per student, they do not increase if both parents borrow.
What to do now
Sign in to StudentAid.gov and check your loan history, servicer and repayment plan.
Add up what you have borrowed. The lifetime limit counts everything you have borrowed, including loans you have already paid back.
Ask your financial aid office how your program is classified and which limits apply to you.
Check your repayment plan. If you take a new loan, look at how it affects your options.
If you are also applying for aid for next year, read our guide to the 2027-28 FAFSA.
How we checked this guide
When we researched this guide, the StudentAid.gov pages did not load for us, so we could not read them directly. The details above come from financial aid offices at several US universities and from summaries by national aid administrators, which agree with each other on the points we included. Where they did not agree or gave no figure, we left the detail out. Please confirm on StudentAid.gov before you make a borrowing decision.
Sources
- StudentAid.gov (Federal Student Aid, official source for loan limits and repayment plans)
- NASFAA (via Clark University): What graduate students need to know, updated May 2026
- Boston College Financial Aid: Federal aid updates
- Illinois State University Financial Aid: Upcoming federal student aid changes for 2026-2027
- Bowling Green State University Financial Aid: Federal student financial aid changes
- Western Michigan University: Federal financial aid changes
Frequently asked questions
Are Grad PLUS loans still available?
Not for new borrowers. Grad PLUS loans were eliminated for new borrowing from July 1, 2026. Students who borrowed a federal loan for their program before that date may be able to keep borrowing Grad PLUS for up to three academic years or the rest of the program, whichever is shorter. Check with your school financial aid office.
What is the new lifetime limit for federal student loans?
Several university aid offices, citing national aid administrators, report a lifetime limit of 257,500 dollars on federal Direct Loans, excluding Parent PLUS loans. Undergraduate loans count toward it.
Did undergraduate loan limits change?
No. Annual and aggregate limits for undergraduate Direct Loans did not change, although undergraduate loans count toward the new lifetime limit.
What are the new Parent PLUS limits?
For Parent PLUS loans borrowed on or after July 1, 2026, the limits reported by university aid offices are 20,000 dollars a year and 65,000 dollars in total per student. Parents who borrowed for the same student before July 1, 2026 may be able to continue under the previous limits for a transition period.
What is the Repayment Assistance Plan?
The Repayment Assistance Plan, or RAP, is a new income-based repayment plan. Aid offices describe payments based on income, forgiveness after 30 years of repayment, and eligibility for Public Service Loan Forgiveness.
Which repayment plans can I use for a new loan?
For federal loans taken out on or after July 1, 2026, borrowers can choose between a standard repayment plan and RAP. Borrowers who do not take out a new federal Direct Loan on or after that date may keep their current options and may also use RAP.
Where should I confirm what applies to me?
Sign in to StudentAid.gov to see your loan history, servicer and repayment plan, and ask your school financial aid office how your program is treated. Rules and legal challenges are still developing.
This article is general information, not financial, legal or tax advice. Rules and figures change, so check the official sources above before you act.