By: Eric Johnson
Nearly one year ago, on July 5, 2025, President Trump signed the One Big Beautiful Bill Act (OBBBA) into law. This omnibus legislation included several changes to the Federal Student Aid (FSA) programs. One of the more significant alterations to FSA due to this legislation was the change to the aggregate loan limits for federal student loans.
Previously, the aggregate loan limit for federal student loans was $138,500. Specific medical tracks permitted students to borrow up to $224,000 in federal student loans.
Starting July 1, students who use federal student loans face a new lifetime aggregate loan limit of $257,500 for all federal student loans combined across undergraduate and graduate/professional coursework. This hard cap explicitly excludes Parent PLUS Loans in the aggregate loan limit calculation. The new hard cap includes all undergraduate loans (subsidized and unsubsidized) and graduate/professional loans (unsubsidized and legacy Grad PLUS).
In addition to the new total loan limit, the OBBA disbanded the Grad PLUS Loan program. Except for legacy Grad PLUS Loan borrowers, students who use federal student aid after June 30, 2026, can receive only a subsidized or unsubsidized loan. There are no exceptions to this new rule.
Graduate and professional students who rely on Grad PLUS Loans will need to find alternative sources of funding. Graduate and professional students have a lifetime limit of $200,000. Any amount a graduate student uses in federal student loans reduces their remaining loan limit for a professional degree program.
A student enrolled in a graduate or doctoral program will also have to contend with an annual loan limit of $20,500. The aggregate loan limit for students enrolled in these degree programs is $100,000.
Professional programs (e.g., M.D., J.D., D.D.S., and Pharm. D.) have a slightly different annual loan limit of $50,000. Their aggregate loan limit also doubles to $200,000 to account for the costlier propositions of these degree programs.
Previously, Parent PLUS Loan borrowers could receive annual funding up to a student’s cost of attendance budget for the applicable award year. There were no lifetime loan limits for Parent PLUS Loan borrowers, which meant some borrowers accrued excessively high levels of debt for their students. To combat this problem, the federal government capped the annual amount a Parent PLUS Loan borrower can receive for their students. It gets a tad tricky to explain, so let’s go through it sequentially.
Parent PLUS Loan borrowers will be able to borrow only $20,000 per dependent student per year. The aggregate loan limit for Parent PLUS Loan borrowers is $65,000 per dependent student. What does this mean? Parents who are using this financing tool will need to be strategic about how much to borrow each year. If a parent borrows the maximum amount in years one, two, and three, they will discover that their remaining eligibility amount in the student’s senior year is $5,000, a shortfall of $15,000. It is also important to note that the new aggregate loan limits per dependent student truly mean that the lifetime amount a parent can borrow per dependent student is $65,000. Gone are the days when a loan borrower can pay down their principal loan balance to reset the aggregate loan limit. Again, parents and students will need to be strategic and communicative with each other to avoid funding lapses in critical moments, such as senior year.
Aggregate loan limits for undergraduate students remain unchanged: $31,000 for dependent students and $57,500 for independent students. Both dependent and independent students can receive up to $23,000 in subsidized loans.
Source: Federal Student Aid
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