Graduate PLUS Loan Program Eliminated for New Borrowers Starting July 1, 2026

Starting July 1, 2026, the federal Graduate PLUS loan program will be eliminated for new borrowers, creating immediate challenges for graduate and professional programs at elite universities. The change, mandated by the One Big Beautiful Bill Act (OBBBA) signed into law on July 4, 2025, represents one of the most significant federal student aid overhauls in recent years and will directly impact how selective institutions package financial aid for their most expensive graduate programs.

According to the Federal Student Aid website, the OBBBA "result[s] in changes to federal student aid programs" with "many updates begin[ning] with enrollment starting July 1, 2026" (source 2, 4). The University of Iowa's financial aid office confirms that "starting July 1, 2026, federal law eliminates the Graduate PLUS loan for new Graduate and Professional student borrowers" (source 8). Harvard University's Student Financial Services has already published guidance noting that "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" (web_search result).

The elimination of Grad PLUS loans—which previously allowed graduate students to borrow up to the full cost of attendance without preset limits—will be particularly consequential for high-cost professional programs at elite institutions. These include law schools, business schools, medical schools, and other graduate programs where annual costs frequently exceed $80,000. Financial aid offices at selective universities must now develop alternative funding strategies, potentially increasing institutional aid, expanding private loan counseling, or restructuring program costs.

While the legislation includes new borrowing caps ($100,000 total for graduate students, $200,000 for professional programs according to web_search results), these limits fall far below the total cost of many multi-year graduate programs at elite institutions. The changes take effect for the 2026-27 academic year, meaning prospective graduate students applying this fall for admission in 2026 will be the first cohort affected.