For nearly twenty years, the Grad PLUS loan program has been a major pillar of federal financial aid for graduate and professional students. These loans allowed students to borrow beyond traditional federal limits and cover their full cost of attendance, including tuition, housing, books, and living expenses. For many, Grad PLUS was the bridge that made graduate school financially possible. 

However, starting July 2026, new Grad PLUS loans will no longer be available under the One Big Beautiful Bill (OBBB) Act.   This pivotal change raises a central question: What will the end of Grad PLUS loans mean for the future of graduate education? 

While the full impact remains to be seen, one word comes to mind: opportunity. Opportunity to innovate, rethink graduate funding, and build smarter, more sustainable solutions for students and institutions alike. 

What’s Changing: New Federal Limits  

Under the new law, federal borrowing for graduate students will be capped: 

• Graduate (Academic) Programs: $20,500 annual limit, $100,000 lifetime maximum 

• Professional Programs (Law, Medicine, etc.): $50,000 annual limit, $200,000 lifetime maximum. 

Borrower Category	Pre-OBBBA Limit	New OBBBA Limit
Undergraduate Stafford (Dependent)	$5,500 – $7,500 per year; $31,000 aggregate	Unchanged
Undergraduate Stafford (Independent)	$9,500 – $12,500 per year; $57,500 aggregate	Unchanged
Parent PLUS (Parents of Undergrad)	Full Cost of Attendance	$20,000 per year; $65,000 aggregate per student
Graduate Stafford (Masters/PhD/MBA)	$20,500 per year; $138,500 aggregate	$20,500 per year; $100,000 aggregate
Graduate Professional Stafford (MD/JD/DDS)	$20,500 per year; $138,500 aggregate	$50,000 per year; $200,000 aggregate
Graduate Grad PLUS	Full Cost of Attendance	Eliminated
All Federal Loans Combined	No lifetime cap	$257,500 lifetime cap

Previously, Grad PLUS loans allowed students to borrow beyond federal limits, filling gaps left by Direct Unsubsidized Loans. Once the program is phased out, students will need to explore other options, such as private loans, scholarships, or institutional aid, to fund their education. Financial aid offices will be crucial partners in helping students navigate these choices and stay on track with their goals. 

A Brief Look Back: Grad PLUS and Its Impact 

Grad PLUS loans weren’t just widely used; they shaped graduate education. While only 16% of graduate students rely on the program, Grad PLUS accounted for 32% of all federal graduate lending, showing just how central it became in helping students pursue advanced degrees. These loans were especially common in high-cost programs, with nearly a quarter of students in programs costing $25,000 to $70,000 using Grad PLUS, and that share rising to 30% for programs above $70,000, according to a 2024 report from the Georgetown University Center on Education and the Workforce. 

Beyond helping students, Grad PLUS also influenced institutions. The availability of additional federal funds allowed schools to expand programs, support student opportunities, and invest in resources. However, research suggests that tuition increases sometimes offset the benefits of increased federal lending. Today, according to recent federal data, about 1.8 million borrowers hold Graduate PLUS loans totaling approximately $119.2 billion in debt, a scale that demonstrates the program’s significance and the magnitude of this transition. 

What’s Next: A New Era in Graduate Funding 

With Grad PLUS loans being phased out, graduate education is entering a new era, one that calls for creativity, collaboration, and thoughtful planning. 

For Students 

For students, this shift requires the exploration of a broader mix of funding options. Scholarships, grants, and institutional aid will play an increasingly central role in covering costs, while private loans can provide flexible solutions to bridge any gaps. Engaging early with financial aid offices can help students build a comprehensive plan, minimize uncertainty, and feel more confident about their financial path through graduate school. Thoughtful planning now can reduce stress later and ensure students can focus on their studies and career goals without unexpected financial obstacles. 

For Institutions 

The end of Grad PLUS loans is prompting schools to rethink how graduate programs are funded. Hybrid approaches that combine scholarships, grants, and external funding can help students cover high-cost programs without relying on a single source of support. 

Institutions are also exploring ways to make aid more flexible and targeted, from directing resources where they’re most needed to offering modular programs or tuition schedules that let students progress at their own pace. 

Partnerships with private lenders can further support students, offering customized loan programs, streamlined processes, and flexible repayment options. Some lenders provide resources beyond financing, such as career readiness tools, coaching, and internship opportunities, to help students graduate on time and launch successful careers. 

By combining these strategies, schools can create funding systems that are clear, manageable, and tailored to student needs, helping students navigate the post-Grad PLUS world with confidence. 

For Private Lenders 

As federal aid changes, private lenders can play a key role in supporting the graduate funding landscape post-Grad PLUS. Thoughtful partnerships open the door to solutions like customized loan programs, flexible repayment options, and streamlined processes that reduce administrative hurdles. Many lenders also provide additional support, offering resources including financial wellness tools, career readiness programs, and internship opportunities to help students successfully complete their programs and transition into their careers. 

When considering private student loans, it’s important to choose a lender that’s transparent about rates and fees, offers flexible repayment options, and provides responsive support throughout your borrowing journey. Look for lenders who prioritize student needs, allow for cosigner release, and offer benefits like autopay discounts or hardship protections. Avoid companies that aren’t upfront about terms or make unrealistic promises, and always research reviews to ensure you’re partnering with a trustworthy lender who will support your goals from enrollment to repayment. 

Check out our Guide to Choosing the Best Private Lender here, for more information.  

Final Thoughts 

The end of Grad PLUS is a moment for all stakeholders to think strategically, plan proactively, and embrace flexible solutions. With careful planning, collaboration, and thoughtful use of available resources, the post-Grad PLUS world can be a time of smarter, more sustainable funding that helps students pursue their education and institutions maintain vibrant, accessible programs with student success at their forefront. 

Ready to take the next step as a student? Explore Ascent’s graduate loan options and AscentUP financial wellness resources to help you make confident decisions throughout grad school.  

For institutions, How to Build a Preferred Lender List: A Checklist for Schools offers practical steps for creating flexible funding options and supporting students effectively in a post-Grad PLUS world. 

About Ascent 

Ascent is a mission-driven fintech company committed to redefining student lending through a focus on access, affordability, and lasting economic impact. Backed by institutional capital, we offer innovative loan options for college and career training programs—helping more students qualify, with or without a cosigner.  But funding is just the start. From career readiness tools to financial wellness resources to over $330,000 in no-essay scholarships, everything we build is designed to turn education into real opportunity.