Key Takeaways 

• The elimination of Grad PLUS loans will fundamentally reshape how graduate students finance their education, challenging both access and affordability. Financial aid offices must proactively adapt policies, train staff, and guide, students to navigate a more complex funding system. 

• Changes begin July 1, 2026, with a three-year transition for current Grad PLUS borrowers. 

• Schools and students should  proactively  plan now for alternative funding strategies, including scholarships, assistantships, and private loans. 

Graduate School Is About to Change 

For decades, the Grad PLUS loan program has helped graduate and professional students bridge the gap between ambition and affordability. However, starting July 2026, new loans will no longer be available under the One Big Beautiful Bill (OBBB) Act.  

This marks one of the most significant changes to graduate financing in a generation.  Students, universities, and financial aid offices will feel the impact. Schools will need to rethink how students pay for programs, and students will need to explore new ways to cover the full cost of their education. 

In this blog, we’ll break down the timeline of the change, explore its far-reaching implications, and offer insights for navigating the challenges ahead. 

Grad PLUS Loans: What They Are—and What’s Changing 

The Grad PLUS loan has long served as a key resource for graduate and professional students to cover the full cost of attendance—including tuition, fees, and living expenses—minus any other financial aid.  

Unlike other federal loans,  Grad PLUS loans aren’t need-based and have higher borrowing limits, making them especially valuable for high-cost programs like law, medicine, or dentistry. They also offer flexible repayment options, such as deferment while enrolled at least half-time. 

For 20 years, this program has been a key tool for students pursuing advanced degrees. Under the new law, federal borrowing for graduate students will now 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  

Previously, Grad PLUS loans allowed students to borrow beyond federal limits, filling gaps left by Direct Unsubsidized Loans. Once the program ends, students will need to explore other options —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. 

Timeline of Grad PLUS Loan Elimination: Key Dates and Borrower Impact 

Here’s a breakdown of key milestones and what they mean for students and schools: 

• July 4, 2025: The One Big Beautiful Bill (OBBB) Act is signed into law, setting the stage for Grad PLUS loan elimination.  

• October 1, 2025: FAFSA opens for the 2026–2027 academic year. Students should apply early to maximize eligibility for grants and scholarships, as some funding is first-come, first-served. 

• March 2, 2026: California state FAFSA deadline for most state financial aid and Cal Grant programs. (September 2, 2026 for community college Cal Grants.) 

• June 30, 2026:Federal FAFSA deadline for the 2025–2026 academic year. 

• July 1, 2026:The new rules take effect—Grad PLUS loans will no longer be available for new borrowers. Students who have already taken out Grad PLUS loans before this date will be “grandfathered in” and can continue borrowing under the existing rules for up to three more years (until July 1, 2029) or until their program ends, whichever comes first. 

• June 30, 2027: Federal FAFSA deadline for the 2026–2027 academic year. 

Graduate School Funding Changes: What Financial Aid Offices Need to Know 

Funding Gaps and Student Access 
With new federal borrowing caps, some students—particularly those in high-cost graduate programs—may find that federal aid does not cover the full cost of attendance. In these cases, private loans and alternative funding options become essential resources. Schools can play a proactive role by partnering with strategic lenders to offer tailored loan solutions and financial support. These partnerships help ensure that students from all backgrounds, including those who may not have access to cosigners or additional resources, can find affordable ways to finance their education. 

Program Enrollment and Viability 
Schools may need to reassess certain programs if students struggle to cover costs. Some programs could see lower enrollment, and in extreme cases, programs might even close. 

Increased Demand for Scholarships and Institutional Aid 
With federal loan options shrinking, more students will likely seek scholarships, assistantships, and private loans. Financial aid offices will need to provide guidance to help students navigate these options effectively. 

Administrative Adjustments 
Aid offices will need to update policies, train staff, and communicate changes clearly. Guiding students through private loans and alternative funding options will be essential to help them stay on track academically. 

Preparing for the Future 

As the July 2026 deadline approaches, the best way to prepare for these changes is to act now. Financial aid offices can take the following proactive steps to support their students and institutions: 

• Develop Partnerships with Private Lenders: Establish relationships with reputable private lenders to offer students viable financing options. 

• Enhance Financial Literacy Programs: Offer workshops and resources to help students understand personal finance, budgeting, and debt management. 

• Advocate for Policy Changes: Engage with policymakers to advocate for the restoration or replacement of Grad PLUS loans to ensure equitable access to graduate education. 

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. Learn more about how we’re working to increase student income by $10 billion by 2028 in our Impact Report.