Grad Students Unaware of Loan Changes
A new national survey from College Ave revealed that 60% of prospective graduate students are unaware of upcoming changes to federal student loans. This knowledge gap exists despite the majority of respondents viewing an advanced degree as essential for their career goals.
- The upcoming changes, effective July 1, 2026, stem from the One Big Beautiful Bill Act (OBBBA) and will eliminate the Federal Direct Graduate PLUS loan program for new borrowers. This program currently allows graduate students to borrow up to the full cost of attendance minus other financial aid. - New federal loans for graduate students will be split into two tiers with different borrowing limits. Standard graduate programs (like those in bioinformatics or computational biology) will have an annual cap of $20,500 and a lifetime aggregate limit of $100,000 for graduate-level borrowing. - Professional degree programs will have higher borrowing limits, with an annual cap of $50,000 and a lifetime aggregate of $200,000. The Department of Education has proposed a narrow definition for "professional" degrees, which includes medicine (M.D.), dentistry (D.D.S.), and veterinary medicine (D.V.M.), among others. - Notably, many other patient-facing health care fields, such as nursing, physician assistant, physical therapy, and genetic counseling, are not included in the proposed "professional" category and would be subject to the lower borrowing limits. - The new aggregate loan limits for graduate and professional programs do not include any federal loans borrowed for undergraduate studies. However, a separate lifetime limit of $257,500 will apply to all federal student loans combined, excluding Parent PLUS loans. - These changes will not affect the 2025-2026 academic year. There is also a "legacy provision" for students who have received a federal loan for their current program before July 1, 2026, which may allow them to continue borrowing under the old rules for up to three more years. - For programs with high costs, like medical school, the new loan limits may not cover the full cost of attendance, potentially requiring students to seek out private loans to bridge the financial gap. The median four-year cost of medical school, for instance, can range from over $286,000 for public institutions to more than $391,000 for private ones.
