Overview
July 4, 2025: The One Big Beautiful Bill Act (OBBBA) was signed into law. The focus of this information is on the changes to the Federal Direct Loan Program per this new law. There are changes to loan provisions for Graduate and Professional students, as well as adjustments to annual and aggregate loan limits for new Parent Plus loan borrowers. Additionally, new loan proration rules still need to be defined.
These changes include eliminating the Graduate PLUS loan program for new Graduate and Professional students. (A Legacy Provision exists if certain requirements are met for returning Graduate and Professional students in the 2026–27 academic year.) There are new annual and aggregate Unsubsidized Direct Loan limits for new Graduate and Professional students, as well as new annual and aggregate Parent PLUS loan limits for new Parent PLUS loan borrowers.
Summary of Federal Loan Changes
- Graduate PLUS eliminated for new Graduate and Professional students.
- Legacy Provision available for some returning students in 2026–27.
- New annual and aggregate Unsubsidized Direct Loan limits for Graduate and Professional students.
- New annual and aggregate Parent PLUS limits for new Parent PLUS borrowers.
- New proration rules pending definition.
Implementation Timeline
November 6, 2025
The Reimagining and Improving Student Education (RISE) committee (established by the Department of Education as a negotiated rulemaking committee) concluded meeting to provide definitions and clarity about the implementation of higher education provisions in Public Law 119–21 (the OBBBA). The RISE committee defined a graduate vs. a professional student, and who qualifies for the Legacy Provision of the Graduate PLUS loan.
January 2026
We anticipate receiving the proposed rule, or Notice of Proposed Rulemaking (NPRM), as the official document that announces and explains the Department of Education’s plan to implement the OBBBA. The NPRM is published in the Federal Register to provide all with the opportunity to submit comments. The proposed rule and the public comments form the basis of the final rule.
February or March 2026
The Department of Education to decide the length of the public comment period and the next steps in this process before the final rules are integrated into the Code of Federal Regulations (CFR). In general, the public comment period is 30 or 60 days.
July 1, 2026
Changes are implemented due to the OBBBA that was signed into law on July 4, 2025.
What is Still Uncertain
- The final rules for implementing the OBBBA have not been finalized. The NPRM process must take place, as well as other regulatory steps.
- The regulations for the OBBBA were not published by November 1, 2025, and this does not meet the Master Calendar requirement. Per 20 U.S. Code 1089, the Department of Education is required to comply with a schedule (specific dates) to assure adequate notification and timely delivery of rules and training materials. It is unclear at this time if legal challenges will occur before the July 1, 2026, implementation date.
Frequently Asked Questions
Does the OBBBA limit student borrowing for postgraduate education?
The Unsubsidized annual and aggregate loan limits are changing based on whether a student is defined as a Graduate or a Professional student, is enrolled in the same credentialed program in 2026–27 as in 2025–26, and if the student previously borrowed in the Federal Direct loan program before July 1, 2026.
| Federal Direct Unsubsidized Loan 2026–27 | Annual Loan Limit | Aggregate Loan Limit |
|---|---|---|
| Graduate Students (Master's, Ph.D. Program) | $20,500* | $100,000 |
| Professional Students (Med, Dent, Law, Pharm) | $50,000 | $200,000 |
*This annual amount is not changing.
Please Note:
- These loan limits do not include amounts borrowed as an undergraduate.
- Students who are both graduate and professional students at some point in their educational career may only borrow up to $200,000 in total for graduate and professional school.
Is there a Legacy Provision for Graduate and Professional students who have already borrowed in the Graduate PLUS loan program?
Yes. A graduate or professional student meets the Legacy Provision and may borrow under the current Graduate PLUS loan limits (up to their annual cost of attendance (COA) by meeting the following criteria:
- The student is enrolled in the same credentialed program in 2026–27 as in 2025–26 (or previous years); and,
- The student borrowed in the Direct Loan Program with either a subsidized, unsubsidized, or Parent or Graduate PLUS loan before July 1, 2026.
The Legacy Provision allows a student to borrow in the Graduate PLUS loan program for what length of time?
For three academic years or the remainder of the expected time to earn their graduate or professional degree, whichever is less.
What academic programs are defined as a Professional program?
As of November 6, 2025, a professional student is defined as a student enrolled in a program of study that awards a professional degree, as defined under section 34 CFR 668.2.
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.), and Theology (M.Div., or M.H.L.).
The Department of Education has proposed defining a professional degree as:
“(i) Signifies both completion of the academic requirements for beginning practice in a given profession and a level of professional skill beyond that normally required for a bachelor's degree;
(ii) Is generally at the doctoral level, and that requires at least six academic years of postsecondary education coursework for completion, including at least two years of post-baccalaureate level coursework;
(iii) Generally, requires professional licensure to begin practice; and
(iv) Includes a four-digit program CIP code, as assigned by the institution or determined by the Secretary, in the same intermediate group as the fields listed in paragraph (2) (i) of this definition.”
Will the list of defined Professional academic programs change?
We do not know yet. The NPRM process will allow everyone to comment on how graduate and professional programs should be defined. The full regulatory process is still underway. The rules are not final.
What academic programs are defined as a Graduate program?
Any program that results in an advanced degree and includes master’s degrees, doctorates, and Ph.D. doctoral degrees.
If a student is going from an Undergraduate program in 2025-26 to a Graduate or Professional program in 2026-27, will the student qualify for the Legacy Provision of the Graduate PLUS loan?
No. The student is not in the same credentialed program in 2026–27 as they were in 2025–26.
Are there other options for students who will no longer have the Graduate PLUS loan program on July 1, 2026?
Possibly. There are loans available in the private loan market. These loans are often based on a credit score, obtaining a co-signer, and other lender requirements. Please refer to our website for additional information about private loan options.
What are the new annual and aggregate Parent PLUS loan limits for new Parent borrowers?
Effective July 1, 2026, new first-time Parent PLUS loan borrowers have new annual and aggregate loan limits. All parents (combined) may borrow $20,000 per year per dependent student. The aggregate loan limit is $65,000 per dependent student.
Will Direct Loans be prorated if an undergraduate, graduate, or professional student is not enrolled full-time?
Yes. The details for prorating annual loan limits based on a student’s percentage of full-time enrollment are not finalized.