Graduate PLUS Loans Eliminated for New Borrowers Starting July 1, 2026

A major overhaul of federal student loan programs takes effect this month, eliminating Graduate PLUS loans for new borrowers and imposing strict new borrowing caps that will reshape how graduate and professional students finance their education at elite institutions.

The changes, enacted through the One Big Beautiful Bill Act (OBBBA) signed into law in July 2025, begin phasing out the Graduate PLUS loan program on July 1, 2026, according to official guidance from the U.S. Department of Education and financial aid offices at multiple universities. Starting this month, new graduate and professional students will no longer have access to these loans, which previously offered flexible borrowing up to the full cost of attendance at programs like Harvard Law, Stanford Business, or medical schools across the Ivy League.

Instead, graduate students will be limited to $20,500 in annual federal Direct Unsubsidized Loans with a new lifetime borrowing cap, as detailed by financial aid offices at institutions including Harvard University and Columbia University. The University of Iowa's financial aid office confirms that "federal law eliminates the Graduate PLUS loan for new Graduate and Professional student borrowers" effective July 1. This represents a fundamental shift in how expensive graduate and professional programs—particularly at elite private universities with high tuition—will be financed moving forward.

While existing borrowers may continue under previous terms, the elimination of Grad PLUS loans for new students creates what the Hechinger Report describes as one of "five big changes coming to higher education" this summer. The changes come alongside updated FAFSA rules and new repayment options, but the Graduate PLUS elimination stands as the most consequential for students targeting advanced degrees at selective institutions. Financial aid offices are now advising prospective graduate students to explore institutional aid, private loans, and state-based programs to fill the gap left by the federal program's phase-out.