Changes Are Coming to the PLUS Loan Programs—Start Planning Now

Substantial changes are coming to the federal student aid PLUS Loan programs because of the reconciliation bill passed by Congress in July. The PLUS Loan programs comprise of undergraduate Parent PLUS Loans and PLUS Loans for graduate students. Here’s what you need to know about the immense changes that will begin to occur in the 2026-27 academic year:

• Elimination of the Graduate PLUS Loan Program

Perhaps one of the largest changes because of the reconciliation bill was the demise of the Graduate PLUS Loan program. The Graduate PLUS Loan program was originally devised as a tool for graduate students to borrow extra funds outside of their $20,500 annual unsubsidized loan aggregate amount. Graduate students who had exhausted their federal student loan eligibility ($138,500) could also tap into this program. With the elimination of this program, graduate students who rely on it should seriously review their other funding options with a financial aid counselor. Private loans may become necessary for graduate students who need the extra funds to accelerate their degree completion. The College also offers interest-free payment plans for graduate students who have a minimal balance after an unsubsidized loan.

• All parents (combined) may borrow $20,000 per year per dependent student and a $65,000 aggregate limit per dependent student (without regard to amounts forgiven, repaid, canceled, or discharged)

Undergraduate students whose parents use a PLUS Loan to finance their education should carefully review the second bullet point. The federal government is now capping the annual amount a parent may borrow per dependent student. Previously, a parent could borrow up to the student’s cost of attendance budget after financial aid awards. Now, there’s a hard cap of $20,000 per year. If your parents borrow more than amount currently, it may be time to review your financial aid options well in advance of the next academic year. There’s also a lifetime aggregate limit per dependent student. Previously, the Parent PLUS Loan program had an unlimited lifetime limit. Now, it’s $65,000, which equates to approximately four years or less of assistance.

These changes are substantial and will require undergraduate and graduate students to prepare even earlier for the 2026-27 academic year. Graduate students should inquire with the Business Office about interest-free payment plans. Graduate students may also need to speak with a financial aid counselor about private student loan options.

While the picture is dreary at the graduate level, it is not as dire at the undergraduate level. Undergraduate students who rely on the Parent PLUS Loan program still have access to it—albeit at capped loan amounts. The same interest-free payment option to graduate students is also available to undergraduate students. A key component in this immense change is understanding that there’s an aggregate limit to the Parent PLUS Loan program that did not exist before. Students will need to carefully navigate their academic programs to avoid throwing away this funding option before degree completion. Very rarely does the federal student aid program see significant changes like this one. It should behoove you to start thinking about the big picture now before next summer arrives.