Major Federal Loan Shift: Graduate PLUS Loans Eliminated for 2026-27

Significant federal student loan changes taking effect this academic year will reshape how graduate and professional students finance their education at elite universities. The One Big Beautiful Bill Act (OBBBA), signed into law in July 2025, eliminates the federal Graduate PLUS Loan program for new borrowers starting July 1, 2026, as confirmed by multiple university financial aid offices and policy analyses.

The elimination of Graduate PLUS loans removes a critical federal financing tool that previously allowed graduate and professional students to borrow up to the full cost of attendance at their institution. According to the University of Iowa's financial aid office, "The Graduate PLUS Loan is no longer available to new borrowers, and new annual and aggregate Direct Unsubsidized Loan limits apply" for the 2026–27 academic year. This change directly impacts students entering high-cost programs at selective universities, including law, medicine, business, and doctoral programs, where tuition and living expenses often exceed standard federal loan limits.

Elite institutions are now forced to develop alternative financing strategies. The law, also referenced as H.R.1 in UC Berkeley's federal updates, represents the most significant restructuring of graduate student financing in decades. As noted in a summer brief from Hunton Andrews Kurth, the OBBBA "introduced changes to federal student aid programs, including the elimination of Graduate PLUS loans for new borrowers." This creates immediate pressure on top universities to expand institutional aid, forge partnerships with private lenders, or adjust program costs to maintain accessibility for students from diverse economic backgrounds. The National Association of Independent Colleges and Universities (NAICU) confirms that the bill "eliminates Grad PLUS borrowing – which currently allows graduate students to borrow up to the full cost of attendance."