For decades, graduate and professional students could borrow federal loans up to the full cost of attendance through the Grad PLUS program. That changed on July 1, 2026. Under the law Congress passed in July 2025, often called the One Big Beautiful Bill Act, federal graduate borrowing now has firm annual and lifetime limits, and repayment works differently for new loans.
If you’re applying to law school, medical school, business school or another graduate program, here’s what you need to know.
What changed on July 1, 2026
| Professional students | Other graduate students | |
|---|---|---|
| Examples | Law, medicine (MD and DO), dentistry, pharmacy, veterinary medicine and other fields on the Department of Education’s list | Most master’s and doctoral programs, including the MBA |
| Annual limit | $50,000 | $20,500 |
| Total limit | $200,000 | $100,000 |
| Grad PLUS | Ended for new borrowers | |
- Lifetime limit: a combined limit of $257,500 in federal student loans applies across undergraduate and graduate study, with narrow exceptions.
- Part-time study: limits are reduced in proportion to your enrollment.
- School limits: schools can set lower loan limits for specific programs.
- Who’s grandfathered: if you were enrolled in a program as of June 30, 2026 and received a federal Direct Loan for it before July 1, 2026, you can generally keep borrowing under the old rules, including Grad PLUS, for up to three academic years or the rest of your program, whichever is shorter.
Which programs count as “professional”?
This is still being settled. On May 1, 2026, the Department of Education published a final rule naming 11 professional fields: pharmacy, dentistry, veterinary medicine, chiropractic, law, medicine, optometry, osteopathic medicine, podiatry, theology and clinical psychology. On June 24, a federal court in Washington, D.C. stayed parts of that definition, and on June 29 the Department published a temporary list of 29 programs, adding several nursing degrees (MSN, DNP and DNAP) and other health professions such as physical and occupational therapy. The Department has said it will defend its original rule, so the list may change as the case continues.
Law and medicine are professional under every version. The MBA is generally treated as a graduate program. If you’re applying to a program in a gray area, ask the financial aid office how it’s classified and what loan limit applies.
What the gap can look like
The new limits fall well short of the full cost of attendance at many programs. These examples are illustrative; actual costs vary widely.
| Program | Total cost of attendance | Maximum federal loans | Gap before scholarships |
|---|---|---|---|
| Law school (three years at $85,000) | $255,000 | $150,000 | $105,000 |
| Medical school, public (median, class of 2026) | About $298,000 | $200,000 | About $98,000 |
| Medical school, private (median, class of 2026) | About $408,000 | $200,000 | About $208,000 |
| MBA (two years at $110,000) | $220,000 | $41,000 | $179,000 |
Medical school costs are AAMC medians for the class of 2026. Law and MBA figures are round-number examples, not averages.
Want to see your own numbers? Our cost and borrowing planner estimates federal loan coverage year by year, including the old rules if you’re grandfathered.
Ways to close the gap
- Scholarships and grants. Law schools award substantial merit aid, and many will reconsider offers. Medical schools offer need-based aid, and a few cover tuition for all or most students. MBA programs award merit fellowships, often at admission.
- Choosing cost-effective programs. In-state public schools, programs with generous aid and those in lower-cost cities can make a large difference.
- Service-based programs. The National Health Service Corps and the military’s Health Professions Scholarship Program pay for medical school in exchange for service. Military and government programs exist for other fields too.
- Employer support. Common for part-time and executive MBA students, and for some working professionals in other fields. Employers can provide up to $5,250 a year in tax-free educational assistance.
- Assistantships and fellowships in many master’s and doctoral programs, which may cover tuition and pay a stipend.
- Savings and work. Even modest savings reduce borrowing, and some programs allow part-time work.
- Private loans, as a last resort after federal options.
Before you take a private loan
Private loans can fill the gap, but they work differently from federal loans:
- Approval and interest rates depend on your credit, and many students need a cosigner.
- They don’t qualify for federal income-driven repayment or Public Service Loan Forgiveness.
- Deferment, forbearance and discharge protections vary by lender.
- Compare several lenders, and ask your school whether it has institutional loans or preferred programs.
How repayment works for new loans
For federal loans first disbursed on or after July 1, 2026, there are two repayment options:
- A Standard plan with fixed payments over 10 to 25 years, depending on how much you borrowed.
- The Repayment Assistance Plan (RAP), with payments of 1% to 10% of adjusted gross income, a $10 monthly minimum and a $50 monthly reduction for each dependent. Unpaid interest is waived when you make a full, on-time payment, and any remaining balance is forgiven after 30 years of qualifying payments.
If you already have federal loans, your options depend on when you borrowed. Borrowers in the SAVE plan, which is ending, need to choose another plan. Check studentaid.gov for your situation.
Public Service Loan Forgiveness
PSLF continues. It forgives remaining federal Direct Loan balances after 120 qualifying monthly payments while you work full time for a government agency or qualifying nonprofit, and RAP payments count. A Department rule that would have excluded some employers was vacated by federal courts on June 30, 2026, a day before it was due to take effect; the Department has appealed, and the rule remains vacated while the appeals proceed. For future public interest lawyers, physicians in nonprofit hospitals and others in public service, PSLF can still make a large difference.
Questions to ask every financial aid office
- What is the full cost of attendance for each year, including living costs?
- Is my program classified as professional or graduate for federal loan limits?
- Does the school set lower loan limits for this program?
- What scholarships and need-based grants are available, and do they renew?
- Does the school offer institutional loans, emergency funds or a loan repayment assistance program?
To borrow federal loans, you’ll need to file the FAFSA each year. Some schools, especially medical schools, also ask for parent financial information when awarding their own need-based aid, even though graduate students are independent for federal aid. Our pages on law school, medical school and business school explain how funding works in each field, and our sliding-scale pricing keeps our own guidance affordable.
Sources
- One Big Beautiful Bill Act Updates, Federal Student Aid, U.S. Department of Education.
- Frequently Asked Questions – Loan Limits, Federal Student Aid, U.S. Department of Education.
- (LOANS-26-05) One Big Beautiful Bill Act NSLDS Eligibility Processing Updates (Updated May 7, 2026), Federal Student Aid, U.S. Department of Education.
- Reimagining and Improving Student Education—Federal Student Loan Program Final Regulations, Federal Register, U.S. Department of Education.
- Update to List of Professional Degree Programs Due to Court Order (Updated July 10, 2026), Federal Student Aid, U.S. Department of Education.
- Department of Education Adds Nursing Degrees to its Interim List of Professional Degree Programs, American Association of Colleges of Nursing.
- Court Temporarily Pauses Key Parts of Professional Student Definition Days Before July 1 Effective Date, National Association of Student Financial Aid Administrators.
- Medical Student Education: Debt, Costs, and Loan Repayment Fact Card for the Class of 2025, Association of American Medical Colleges.
- Repayment Assistance Plan (RAP), Edfinancial Services, a Federal Student Aid loan servicer.
- ED Appeals Court Decision That Struck Down PSLF Final Rule, National Association of Student Financial Aid Administrators.
- Publication 970, Tax Benefits for Education, Internal Revenue Service.