START HERE: What You Need to Know
Federal student loan rules are changing beginning July 1, 2026, due to the One Big Beautiful Bill Act (OBBBA). These changes may affect how much you can borrow, and which federal loan programs are available to you.
You should review this information if you:
- Plan to start a Graduate or Professional program in the 2026–27 academic year.
- Are continuing in the same Graduate or Professional program and borrowed federal loans before July 1, 2026.
- Plan to change academic programs or institutions.
- Expect to rely on Graduate PLUS loans to cover educational costs.
This page will be updated as additional federal guidance is released.
What Is Changing on July 1, 2026
Starting July 1, 2026, federal law eliminates the Graduate PLUS loan for new Graduate and Professional student borrowers and sets new annual and lifetime limits on Unsubsidized Direct Loans. Some returning students may still qualify under a limited legacy provision if specific requirements are met.
Additional changes include new annual and aggregate Parent PLUS loan limits for new Parent PLUS borrowers and future loan proration rules that are still being defined.
Which Situation Fits You
Review the section below that best matches your situation.
New Graduate or Professional Student Starting in 2026–27
If you are starting a Graduate or Professional program in 2026–27 and have not received a federal Direct Loan disbursement before July 1, 2026, the Graduate PLUS loan will not be available to you. You will be limited to the new Unsubsidized Direct Loan annual and aggregate limits.
Returning Student in the Same Program
If you are continuing in the same credentialed academic program and received any type of federal Direct Loan disbursement before July 1, 2026, you may qualify for the Graduate PLUS legacy provision, which allows continued borrowing under current rules for a limited time.
Eligibility depends on remaining enrolled in the same program at the same institution.
Students Changing Programs or Institutions
If you change academic programs, transfer to another institution, or withdraw and later enroll in a different program, you will not qualify for the legacy provision and will be subject to the new loan limits and program restrictions.
Graduate Plus Loan Changes
The Graduate PLUS loan program will no longer be available to new Graduate and Professional student borrowers beginning July 1, 2026.
Graduate PLUS Legacy Provision
Some returning students may qualify for a legacy provision that allows continued borrowing through the Graduate PLUS loan program if they:
- Received a federal Direct Loan disbursement before July 1, 2026, and
- Remain enrolled in the same credentialed program at the same institution.
Eligible students may borrow Graduate PLUS loans for up to three additional academic years or the remainder of their expected time to credential, whichever is less.
Unsubsidized Direct Loan Limits Beginning July 1, 2026
New annual and aggregate Unsubsidized Direct Loan limits apply to Graduate and Professional students who do not qualify for the legacy provision.
Graduate Students
Master’s and Ph.D. programs
| Limit | Amount |
|---|---|
| Annual Limit | $20,500 |
| Aggregate Limit | $100,000 |
Professional Students
Medicine, Dentistry, Law, Pharmacy, Psy.D., Ph.D., and other defined professional programs
| Limit | Amount |
|---|---|
| Annual Limit | $50,000 |
| Aggregate Limit | $200,000 |
Please note:
- These limits do not include amounts borrowed as an undergraduate.
- Students who are both graduate and professional students at different points in their education may borrow a combined maximum of $200,000 for graduate and professional study.
How Professional and Graduate Programs are Defined
As of November 6, 2025, a professional student is defined as a student enrolled in a program that awards a professional degree under federal regulations.
Examples include, but are not limited to:
- Pharmacy (Pharm.D.)
- Dentistry (D.D.S. or D.M.D.)
- Veterinary Medicine (D.V.M.)
- Chiropractic (D.C. or D.C.M.)
- Law (L.L.B. or J.D.)
- Medicine (M.D.)
- Optometry (O.D.)
- Osteopathic Medicine (D.O.)
- Podiatry (D.P.M., D.P., or Pod.D.)
- Clinical Psychology (Psy.D. or Ph.D.)
- Theology (M.Div. or M.H.L.)
Any student not enrolled in one of these programs is considered a Graduate student.
The Department of Education has proposed additional criteria to define professional degrees. Final definitions are not yet official and may change.
Implementation Timeline
July 4, 2025
The One Big Beautiful Bill Act was signed into law.
November 6, 2025
The Department of Education’s negotiated rulemaking committee, known as the Reimagining and Improving Student Education committee, concluded meetings and proposed definitions related to Graduate and Professional students and Graduate PLUS legacy eligibility.
January 2026
The Department of Education released a Federal Register as part of the Notice of Proposed Rulemaking process outlining how the law will be implemented.
March 2026
Public comment may be submitted by March 2, 2026, before the final rules are issued.
May 1, 2026
A draft of the final rules is to be made available.
June 1, 2026
Final Rules are to be made available.
July 1, 2026
Federal loan changes take effect.
What Is Still Uncertain
Federal regulations implementing the OBBBA have not yet been finalized. As a result:
- Definitions and requirements may change.
- Loan proration rules are not yet defined.
This page will be updated as federal guidance becomes final.
Private Loan Options
Some students may find that federal loan limits do not fully cover their educational costs. In these cases, private loans may be an option.
Private loans are not federal loans and typically:
- Are based on credit history.
- May require a co-signer.
- Have different interest rates, repayment terms, and borrower protections.
We provide a preferred lender list to help students compare private loan options. You are not required to borrow from lenders on this list and may choose any lender that meets your needs.
Parent Plus Loan Changes
Effective July 1, 2026, new first-time Parent PLUS borrowers are subject to new annual and lifetime loan limits.
| Limit | Amount |
|---|---|
| Annual Limit | $20,000 per dependent student |
| Aggregate Limit | $65,000 per dependent student |
These limits apply to all parents combined for a single dependent student.
Frequently Asked Questions
Does the OBBBA limit borrowing for graduate or professional education?
The law changes which loan programs are available and sets new borrowing limits. Some students will have lower total federal loan eligibility than under previous rules.
If I move from undergraduate study to graduate or professional study in 2026–27, do I qualify for the legacy provision?
No. The legacy provision requires enrollment in the same credentialed program before and after July 1, 2026.
Will Direct Loans be prorated?
Yes. Details on proration based on a student's actual enrollment are still being finalized. However, students enrolled less than full-time will have their loans prorated based on enrollment intensity.
Questions or Need Help?
If you are unsure how these changes apply to your situation, contact our office.
Office of Student Financial Aid
319-335-1450
financial-aid@uiowa.edu
Last updated: February 2026