Attending graduate school has always required careful financial planning, but starting this summer, it will become even more important. Beginning July 1, 2026, graduate students borrowing for the first time will no longer have access to Grad PLUS loans under the One Big Beautiful Bill (OBBB) Act.

The removal of Grad PLUS loans represents one of the most significant changes to graduate student financing in years. Previously, Grad PLUS loans allowed students to borrow up to their full cost of attendance, including tuition, housing, books, and living expenses. Now, federal Direct Unsubsidized Loans will be the primary federal loan available, with a fixed annual borrowing limit of $20,500. For many grad programs, this amount falls significantly short of the total cost.

As a result, students should expect several key changes:

• Federal loans may no longer cover your full cost of attendance. Students will need to identify additional funding sources to bridge the gap between federal loan limits and total expenses.
• Private student loans will become more important. Many graduate students will need to rely on private lenders, including credit unions, to supplement federal aid.
• Financial planning will need to start earlier. Without Grad PLUS loans as a fallback option, students will benefit from researching scholarships, assistantships, and loan options well before their program begins.
• Borrowing decisions may require more careful comparison. Students will need to evaluate interest rates, repayment terms, and total borrowing amounts more closely to ensure long-term affordability.

The good news is that graduate school is still accessible. With the right strategy, you can build a plan that keeps your education affordable and your future on track.

Start with the FAFSA

The FAFSA remains the foundation of your graduate school funding plan. Completing it allows you to access federal Direct Unsubsidized Loans and determines your eligibility for school-based and state financial aid.

Maximize Scholarships and Assistantships First

Before turning to loans, focus on funding that doesn’t need to be repaid. Many graduate students qualify for financial support that can significantly reduce their overall costs.

Common opportunities include:

• Scholarships offered by schools, professional organizations, and private foundations
• Fellowships that may include tuition coverage and living stipends
• Teaching or research assistantships that provide income and, in some cases, reduced tuition

Graduate schools may also offer additional funding beyond your initial aid package. Department-specific scholarships, fellowships, or assistantships may become available throughout the year, so it’s worth staying in touch with your financial aid office. Even partial funding can make a meaningful difference in how much you need to borrow.

Use Federal Loans as Your Core Borrowing Option

Even after Grad PLUS loans are eliminated, graduate students can still borrow up to $20,500 per year ($100,000 aggregate) through federal Direct Unsubsidized Loans. These loans offer fixed interest rates and access to federal repayment protections. However, federal loans may only cover part of your total expenses.

Note: Students enrolled in certain professional degree programs such as medical, dental, and veterinary, may borrow up to $50,000, with an aggregate cap of $200,000.

Because annual borrowing limits are capped, these loans often serve as a starting point rather than a complete solution. After accepting federal loans, many students still need additional funding to cover tuition, housing, and other education expenses.

Consider Private Student Loans to Fill the Gap

With Grad PLUS loans no longer available, private student loans will play a larger role in helping graduate students cover remaining costs. Private loans are offered by banks, credit unions, and nonprofit lenders, and they can be used to bridge the gap between your financial aid and your total cost of attendance.

When comparing private loan options, look for:

• Competitive interest rates and low or no fees
• Flexible repayment options while in school
• Trusted lenders with experience supporting students

Choosing the right lender can help you manage your costs both during school and after graduation.

What Happens to Existing Grad PLUS Loans?

If you already have Grad PLUS loans, the elimination of the program does not take away the loans you’ve already borrowed. Your existing Grad PLUS loans will remain in place, and their terms will not change.

Students currently in graduate programs can continue borrowing under the Grad PLUS program through the end of their current program or for three more years – whichever comes first.

Build a Complete Funding Plan

The end of Grad PLUS loans means graduate students need to take a more proactive approach to funding their education. The most effective plans combine multiple sources, including federal loans, scholarships, assistantships, private loans, and employer support.

Taking time to explore all your options can help you:

• Reduce your total borrowing
• Find lower-cost funding sources
• Avoid unexpected financial gaps

Graduate school is an investment in your future. With thoughtful planning and the right mix of funding, you can continue your education with confidence—even as federal loan options evolve.

For more information, download our Guide to Paying for Grad School.