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Frequently Asked Questions: Federal Reconciliation Bill

The recently passed federal budget bill includes significant changes to student loan programs, especially for graduate and professional students. While some details are clear, many aspects are still being finalized by the U.S. Department of Education.

To help you make sense of what’s changing (and what isn’t), we’ve put together a list of frequently asked questions for current students, incoming students, alumni, and those pursuing loan forgiveness. We’ll continue to update this section as more information becomes available.

 

I’m a currently enrolled graduate or professional student at Northwestern. What should I expect?

If you’ve borrowed a GradPLUS Loan for your current graduate or professional program before July 1, 2026, you are grandfathered in under the existing rules. This means you can continue borrowing GradPLUS loans (and Unsubsidized Loans up to current limits) for up to three more years or until your program ends—whichever comes first.

You do not need to take any immediate action, but be aware that starting July 1, 2026, new rules will apply to students who haven’t borrowed by then. Also note that we’re waiting on clarification from the U.S. Department of Education (ED) about how certain edge cases (like part-time students or dual-degree programs) will be treated.

I’ll be starting a graduate or professional program after July 1, 2026. What changes apply to me?

You will not be eligible for the GradPLUS Loan. Instead, the amount you can borrow in federal Unsubsidized Loans will depend on whether your program is classified as “professional” or “graduate”:

  • Professional programs (e.g., law, medicine, veterinary) may allow up to $50,000 per year, with a $200,000 lifetime limit.
  • Graduate programs (e.g., MA, MS, PhD) may allow up to $20,500 per year, with a $100,000 lifetime limit.

However, we are still waiting on ED to clarify which programs fall into which category. If you're considering a dual-degree or part-time program, these details could matter significantly. We’ll share updates as soon as we have them.

I’m a currently enrolled undergraduate student at Northwestern. Will this affect my financial aid?

For most undergraduates, the answer is no—there are no changes to existing undergraduate student loan limits or Pell Grant eligibility in this bill.

However, if your parent borrows a Parent PLUS Loan to help cover your education costs, there will be changes starting July 1, 2026:

  • New Parent PLUS borrowing will be limited to $20,000 per student per year, with a lifetime cap of $65,000.
  • If your parent has already borrowed a Parent PLUS Loan for your current undergraduate program before July 1, 2026, they may continue borrowing at the current limits for up to three more years or until your program ends.

I’ll be starting as a new undergraduate student after July 1, 2026. Will my financial aid be different?

Not much will change for you personally. You will still have access to federal Direct Loans and Pell Grants under current rules.

However, if your parent plans to take out a Parent PLUS Loan, they will be limited to $20,000 per year per student, with a $65,000 lifetime maximum, starting with the 2026–27 academic year.

I’ve already graduated and am in repayment. Do these changes affect me?

In most cases, no. If your loans were disbursed before July 1, 2026, you will retain access to your current repayment plan options, including:

  • Income-Based Repayment (IBR)
  • Pay As You Earn (PAYE)- note could be phased out due to pending litigation
  • Standard 10- or 25-year plans

However, if you borrow any new loans after July 1, 2026, those loans will only be eligible for the new Repayment Assistance Program (RAP).

Important: All current borrowers must choose a repayment plan by June 30, 2028. If you don’t, you’ll be automatically moved into RAP, which may be less favorable depending on your situation.

I’m working toward Public Service Loan Forgiveness (PSLF). Is that still available?

Yes! The PSLF program remains unchanged in this legislation.

If you are already pursuing PSLF—or plan to—you can continue making qualifying payments under an eligible repayment plan. Just be sure to certify your employment and remain in good standing. Future changes to loan repayment options (like RAP) may affect how payments are counted, so keep records and watch for updates.