Financial Aid Changes in 2026-27
On July 4, 2025, HR 1 – Public Law No. 119–21, known as the “Big Beautiful Bill,” was signed into law. This legislation introduces sweeping changes to how students and families pay for higher education. The provisions include the phase-out of the Grad PLUS Loan Program, new annual and lifetime loan limits, adjustments to federal grant and loan programs, and fewer repayment options for new borrowers.
The Department of Education has not yet issued the official regulations that will define how these changes will be implemented. However, the summary below provides an overview of what we currently know—and what is still unclear—about how this law may affect financial aid beginning in the 2026–27 academic year.
For now, please be aware that:
Financial aid for the 2025–26 academic year is not changing.
If you start a new graduate program before July 1, 2026, you remain eligible for Federal Direct Graduate PLUS Loans (GradPLUS) under current rules.
If you start a new graduate program after July 1, 2026, you will be able to apply for student loans through federal and private lending processes. GW plans to provide a new homepage to highlight the process for students to identify various loan options in April 2026.
Recent Changes: Student Loan Implications for the 2026-27 Academic Year
Federal Direct Graduate PLUS Loans Are Being Phased Out
Beginning July 1, 2026, new graduate and professional students will no longer be able to take out Federal Direct Graduate PLUS Loans.
If you’re currently enrolled and have already borrowed a GradPLUS Loan before that date, you can continue to access GradPLUS funds for up to three more years or until you finish your program—whichever comes first.
This continuation applies only to your current program of study. If you start a new program after July 1, 2026, GradPLUS Loans will no longer be available for that program.
New Graduate Loan Limits
Also starting July 1, 2026:
Professional students (for example, those in medicine, law, or similar licensure-based programs) may borrow up to $50,000 per year, with a lifetime limit of $200,000 in federal Unsubsidized Loans.
Other graduate students may borrow up to $20,500 per year, with a lifetime limit of $100,000.
Students already enrolled and using Unsubsidized or GradPLUS Loans in their current program will keep their current borrowing limits for up to three more years or until their program ends.
The Department of Education will release more details on how “professional” and “graduate” programs will be defined.
Undergraduate Loan Rules Are Not Changing
Undergraduate borrowing limits and Pell Grants will remain the same.
However, Parent PLUS Loans will be capped at $20,000 per student per year and a $65,000 lifetime limit beginning July 1, 2026.
Parents who borrowed before that date can continue borrowing under the current limits for up to three additional years or until their student completes their program.
Public Service Loan Forgiveness (PSLF) Remains Intact
Good news. PSLF is not changing. Borrowers working in qualifying public service jobs will still be able to pursue loan forgiveness under the same terms.
Changes to Repayment Options
For loans disbursed after July 1, 2026, existing income-driven repayment plans (IBR, PAYE, SAVE) will be replaced by a new Repayment Assistance Program (RAP).
Key points:
Borrowers who take new loans after that date can choose RAP or standard 10- or 25-year repayment plans.
Current borrowers who do not take new loans after July 1, 2026, can remain in existing income-driven plans—but must enroll by June 30, 2028.
Those who miss that deadline will automatically be moved into RAP.
We will provide more details once the Department of Education releases repayment examples and guidance.
Details to be Determined by the new Federal Student Aid Regulations
What Counts as a “Professional” Program?
The legislation mentions medicine, law, dentistry, and theology, but the definition is still open-ended. The Department of Education will need to determine which programs qualify for the higher loan limits. This could also affect dual-degree programs (like JD/PhD or MBA/MPH), and we’ll share updates as soon as there’s clarification.
Current Students Ability to Opt-Out of GradPLUS “Grandfathering”?
Some students have asked whether they can skip GradPLUS eligibility to take advantage of the new $50,000 Unsubsidized Loan cap.
As of October 1, 2025 this option is unclear. Our national association (NASFAA) has requested guidance from the Department of Education, and we’ll share updates once we have them.
Loan Proration for Part-Time Students
The new law may prorate loan limits for students enrolled less than full-time. For example, a half-time graduate student might only be eligible for half the annual borrowing limit. We’re waiting for the Department of Education to clarify how this will apply to both graduate and undergraduate students.
Updated Information
Our office is carefully tracking these changes and will keep this site updated as new information becomes available.
We know this is a lot to absorb. Please know we’re here to help you navigate these changes and will continue to share updates as soon as we learn more.
Frequently Asked Questions (FAQs)
- What is changing with graduate student loans?
Due to the HR-1 legislation, the Federal Graduate PLUS Loan program is being phased out. Beginning with the 2026–2027 academic year, students will no longer be able to borrow through the federal PLUS program, unless they meet legacy requirement which is defined as having borrowed a federal unsubsidized or GradPLUS loan prior to July 1, 2026.
- Will I still be able to get student loans to finance my graduate education?
Yes. The university is committed to ensuring that graduate students continue to have access to affordable student loans. While the source of loans will shift from federal to private lenders, we fully expect to make similar loan options available to all new and returning graduate students.
- How will the private loan program work?
Private lenders are already working on expansions to current programs.
The university has created a Graduate Student Loan Task Force to identify trusted lending sources and to select an application platform that is easy to use, accessible, and transparent.
Our goal is to provide information about loans that are:- Readily available to graduate/professional students
- Competitive with the interest rates and borrowing levels previously offered under the PLUS program
- Guaranteed by lenders with strong consumer protections and best-in-practice service standards
- Will these new private loans be more expensive than the Federal Graduate PLUS Loans?
We do not anticipate major differences. The university expects private lending arrangements to offer borrowing levels and rates that are comparable to what students received through the PLUS program. Specific details on rates and terms will be shared once federal guidance and lender agreements are finalized.
- When will the loan options be available?
We expect the private loan arrangements to be finalized by April 2026, giving students ample time to apply for and confirm their loans before classes begin in August 2026.
- How can I prepare in the meantime?
Students do not need to take any action right now. Updated information will be provided as soon as federal regulations and guidance are made available. You should continue planning your graduate education as you normally would.
NOTE: If you wish to be proactive, you should check your credit health. You can do this by going to AnnualCreditReport.com and requesting your free credit reports from Transunion, Experian and Equifax.- Will these loans be available to both new and returning students?
Yes. Both new graduate students enrolling for the first time and continuing students will continue to have access to private loan options.
- What if I already rely on Graduate PLUS Loans to cover my costs?
If you are currently using Graduate PLUS Loans, there is a legacy opportunity. You will be able to continue borrowing through the program until it officially sunsets on June 30, 2029.
- What methodology will the university use to vet lenders?
The Student Loan Task Force is prioritizing strong student services, transparency, and accessibility in selecting lending partners. We are committed to identifying lenders that demonstrate a commitment to strong consumer protections, competitive loan programs, and proven service standards.
- Where can I get updates and ask questions?
The university will share updates on loan programs as soon as information becomes available. A dedicated webpage and financial aid contact team will be launched in 2026 to support students through the transition.
- Are there new limits on the amount of money graduate students can borrow for their degree from private lenders?
The new federal regulations for private borrowing are not available yet. We expect the borrowing limits under the new private loan program to be similar to what was available under the Federal Graduate PLUS Loan program. That means most students should be able to borrow enough to cover their full cost of attendance, including tuition, fees, and reasonable living expenses.
- What happens if I reach the maximum borrowing limit?
If a student reaches the maximum borrowing limit set by a private lender, they will not be able to borrow additional funds through that specific loan program. However, the university’s financial aid office will work with the students to explore other available options, which may include:
- Additional private loan programs from other participating lenders
- Employer tuition support programs
- Extended payment plans