How Grad Schools Cover Rising Tuition and Fees After Grad PLUS Loans End

What changed on July 1, 2026

The Grad PLUS loan program ended for new borrowers on July 1, 2026, under the 2025 reconciliation law known as the One Big Beautiful Bill Act. For 20 years, Grad PLUS let graduate and professional students borrow federal loans up to their full cost of attendance, covering tuition, fees, and living costs beyond what Direct Unsubsidized Loans allowed. That option is gone for anyone taking out a first federal loan for a new program after the cutoff UC Law San Francisco financial aid office .

The new federal borrowing caps

In place of Grad PLUS, graduate and professional students now rely on Direct Unsubsidized Loans with new annual and lifetime limits. Most master's and doctoral programs are capped at $20,500 a year and $100,000 total. Law, medical, dental, and other professional degree programs get a higher cap, $50,000 a year and $200,000 total, reflecting their higher typical cost University of Iowa financial aid office . A separate $257,500 lifetime limit applies across all federal loans you have ever borrowed, undergraduate and graduate combined, not counting Parent PLUS loans.

Who still qualifies for Grad PLUS as a legacy borrower

If you received a Direct Loan disbursement for your current program before July 1, 2026, and you stay enrolled in that same program at the same school, you remain eligible to borrow under the old Grad PLUS rules for up to 3 more years or until you finish, whichever comes first. Check with your financial aid office to confirm your legacy status before you assume you lost access, since eligibility depends on your specific enrollment and disbursement history.

How schools are covering the gap

For students whose cost of attendance exceeds the new federal caps, financial aid offices point to a mix of options rather than one replacement for Grad PLUS.

• Private student loans, which do not carry the same fixed caps but require a credit check or a cosigner and typically cost more without federal protections.

• Assistantships and fellowships that include a tuition waiver and stipend, common in PhD programs and increasingly offered in some master's programs to stay competitive.

• Employer tuition assistance, up to $5,250 a year tax-free under IRS Section 127, a benefit Congress made permanent in 2025 IRS .

• Institutional payment plans that split tuition into monthly installments instead of one lump sum per term.

• State and school-based grants, which do not require repayment and are worth checking even if you assumed you would not qualify.

What this means for your loan repayment plan

The same 2025 law replaced the SAVE plan with a new Repayment Assistance Plan and consolidated the number of repayment plan options open to new borrowers US Department of Education . If you plan to borrow for graduate school, check studentaid.gov for the repayment plans open to you before you sign a loan, since your options depend on when you first borrowed.

Steps to take before you borrow for graduate school

1. Get your school's full cost of attendance, including living costs, not just tuition.

2. Subtract the new federal loan caps to see your actual gap.

3. Ask your financial aid office about assistantships, waivers, and school-based grants before you look at private loans.

4. Ask your employer about Section 127 tuition assistance if you plan to work while you study.

5. Compare private loan terms across at least 2-3 lenders if you still need to borrow the rest.