The federal government is changing student loan rules. New borrowing limits will begin in July 2026. These changes will affect future college students and their families. The new law aims to control rising national student debt.
Graduate and Professional Student Caps
New rules limit graduate student borrowing. They can borrow up to $20,500 annually. A lifetime cap is now set at $100,000. Students pursuing professional degrees face different limits. Law and medical students can borrow $50,000 per year. Their total lifetime borrowing is capped at $200,000.
Changes to Parent PLUS Loans
Parents who use PLUS loans also face new restrictions. They can borrow a maximum of $20,000 per year per child. The total lifetime limit for Parent PLUS loans is $65,000 for each child. These caps mark a major shift from the current system.
Who Will The New Limits Impact?
These changes will affect many students nationwide. An Urban Institute analysis showed significant impact. Over half of dental students borrow above the new limits. Roughly 40 percent of medical students also exceed the new caps. About 30 percent of families using Parent PLUS loans will be affected. Critics worry this could limit access to professional degrees.
Graduate PLUS Program Ends
The government will eliminate the Graduate PLUS loan program. New borrowers cannot use this option after July 1, 2026. A legacy provision gives currently enrolled students some flexibility. They can access the loan for up to three more years.
Simplified Repayment Plans
Loan repayment options will become simpler. Borrowers will have two choices. A revised Standard Plan offers fixed payments over 10 to 25 years. A new income-driven plan is also an option. The Repayment Assistance Plan (RAP) bases payments on income. Monthly payments will be 1-10% of a borrower’s income. The plan forgives remaining balances after 30 years.
Rules for Current Borrowers
Current loan holders will see fewer immediate changes. Existing loan terms stay in place for up to three academic years. This grandfather clause allows current students to finish their degrees under old rules. The protection ends once they graduate or after three years.
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