--- title: Congress Capped How Much Families Can Borrow for College and Graduate School description: Grad PLUS loans ended July 1, 2026. Professional students can borrow $50,000 a year, parents $20,000 per child. What the new federal caps mean. author: Darie Nani (Editor-in-Chief) updated: 2026-08-06T05:23:07.812Z canonical: https://richdadmagazine.com/article/federal-student-loan-caps-grad-plus-ends image: https://cdn.nanimediahouse.com/federal-student-loan-caps-2026-109290.webp categories: Money & Legacy content_type: News region: United States publication: Rich Dad Magazine schema_type: Article --- Congress has ended Grad PLUS loans for new borrowers and, for the first time, put fixed dollar limits on how much parents can borrow for a dependent child's education. Both changes took effect on July 1, 2026, and both come from Public Law 119-21, the reconciliation law Congress passed in July 2025. ## Congress Ended Grad PLUS Loans for New Borrowers Until this year a graduate or professional student could borrow a Grad PLUS loan up to his full cost of attendance, with no dollar ceiling. [Public Law 119-21](https://www.govinfo.gov/content/pkg/PLAW-119publ21/html/PLAW-119publ21.htm) closes the program. For any period of instruction beginning on or after July 1, 2026, a graduate or professional student is no longer eligible for a Federal Direct PLUS Loan. ## Professional Students Are Held to $50,000 a Year A professional student, meaning one enrolled in a program awarding a professional degree such as medicine, dentistry or law, can borrow up to $50,000 a year in federal Unsubsidized Stafford loans and up to $200,000 in total on top of whatever he borrowed as an undergraduate. Any other graduate student is held to $20,500 a year and $100,000 in total. Across everything a student borrows federally, undergraduate and graduate together, the ceiling is now $257,500. ## Parents Can Borrow $20,000 a Year and $65,000 per Child Parent PLUS loans have their own caps now. For each dependent student, the most that all of his parents together may borrow is $20,000 in a year and $65,000 over the whole of that child's education. The $65,000 counts in full whatever happens to the debt afterwards, so paying part of it back does not free up room to borrow again. Schools have a say as well. A financial aid administrator may set a lower limit for a particular program of study, as long as the same limit applies to every student enrolled in it. ## Students Already Enrolled Keep the Old Rules for Up to Three Years A student who was already enrolled in his program on June 30, 2026, and had already taken a loan for that program, is not covered by any of this. The [Education Department's guidance to financial aid offices](https://fsapartners.ed.gov/sites/default/files/2026-05/FrequentlyAskedQuestionsLoanLimits.pdf) calls these students legacy borrowers. For them the previous terms continue for the lesser of three academic years or the time left in the program: $20,500 a year in Unsubsidized loans, continued access to Grad PLUS up to cost of attendance minus other aid, and a combined Subsidized and Unsubsidized total of $138,500 including undergraduate borrowing. Their parents can keep borrowing Parent PLUS up to cost of attendance minus other aid, without the new caps. Undergraduate borrowing limits are unchanged for everybody, legacy borrower or not. ## Credit Unions Are Offering Lines of Credit in the Gap Private lenders are moving into the space Grad PLUS leaves behind. CU Student Choice, which supplies education financing to credit unions, has launched a line of credit for students in professional programs: the borrower applies once and draws only what he needs across several years, subject to annual review and credit approval, rather than reapplying every year. Langley Federal Credit Union and Elements Financial are the first two offering it, and the company says about a dozen more credit unions will follow within 45 days. “The elimination of Graduate PLUS Loans has created an immediate need for new financing options for professional students,” said Scott Patterson, president and chief executive of CU Student Choice. ## FAQ **Q: Are Grad PLUS loans really gone?** Yes, for new borrowers. Since July 1, 2026, a graduate or professional student starting a new period of instruction cannot take out a Federal Direct PLUS Loan. Students who were already enrolled before that date in a program they had already borrowed for keep access to Grad PLUS as legacy borrowers. **Q: What is a legacy borrower and do I qualify?** A legacy borrower is a student who was enrolled in his program on June 30, 2026 and had already received a loan for it. He keeps the previous rules, including Grad PLUS, for the lesser of three academic years or the time remaining in his program. **Q: How much can a medical student borrow in federal loans now?** He can borrow up to $50,000 a year in federal Unsubsidized loans and up to $200,000 on top of his undergraduate borrowing, within an overall federal ceiling of $257,500. Parent PLUS loans his parents take out are counted separately and capped at $20,000 a year and $65,000 in total. **Q: Do the new caps affect undergraduate loans?** No. Undergraduate federal borrowing limits are unchanged. The new caps apply to graduate and professional study and to Parent PLUS loans taken out for a dependent student. **Q: What happens if a student is enrolled part time?** His annual limit is cut in direct proportion to how far short of full-time enrollment he is. **Q: What happens if the caps do not cover the full cost?** The law does not address it. Some credit unions and other private lenders have started offering financing outside the federal system, on their own terms and subject to credit approval.