The Recent Reconciliation Bill: What We Know So Far
What We Do Know
GradPLUS Loans Are Being Phased Out
- Starting July 1, 2026, new borrowers will no longer be eligible for the federal GradPLUS Loan.
- However, if you are enrolled in your current program and have borrowed a GradPLUS loan before July 1, 2026, you will still be able to access GradPLUS for up to three additional years or until your program ends—whichever comes first.
- This “grandfathering” applies only to loans borrowed for your current program. If you borrowed GradPLUS for a previous program and start a new one after July 1, 2026, you won’t be eligible for the loan in your new program.
New Graduate Loan Limits Are Coming
Starting July 1, 2026:
- Professional students (e.g., law, medicine, etc.) may borrow up to $50,000 per year in Unsubsidized Loans, with a lifetime limit of $200,000.
- Graduate students in other programs may borrow up to $20,500 per year, with a lifetime limit of $100,000.
- Much still depends on how “professional” vs. “graduate” is defined—see below.
- If you have borrowed an Unsubsidized loan in your current program of study, you will continue to qualify for the existing Unsubsidized Loan limits along with the GradPLUS loan (if you have also borrowed a GradPLUS loan in your existing program of study) for an additional 3 years or the end of your program, whichever comes first.
Undergraduate Loan Limits Remain the Same
- No changes were made to undergraduate borrowing limits, loan types or the Pell grant program.
- However, Parent PLUS Loans will be capped starting July 1, 2026, at $20,000 per student per year and a lifetime maximum of $65,000 per student.
- Parent PLUS borrowers who have borrowed for their students prior to July 1, 2026, the parent borrower can continue to borrow the Parent PLUS at the current (pre-July 1, 2026) borrowing levels for up to an additional 3 years or the end of student’s program, whichever is first.
Public Service Loan Forgiveness (PSLF) Is Unchanged
- There are no changes to PSLF in this bill. Students pursuing careers in qualifying public service roles will still have this option available.
What We Don’t Know (Yet)
What Counts as a “Professional” Program?
The bill includes examples like medicine, law, dentistry, and theology—but the definition remains broad and vague, with phrases like “not limited to” and “generally requires licensure.” ED will have to decide which programs qualify for the $50,000 borrowing cap.
This may also impact dual degree programs (like JD/PhD or MBA/MPH) where one program is considered “professional” and the other is not. We expect clarification in the months ahead.
Can Students Opt Out of the GradPLUS Grandfathering?
We’ve already heard from students wondering: If I’m in a professional program and eligible for GradPLUS after July 1, 2026, can I choose to forgo it in order to access the new $50,000 Unsubsidized Loan cap?
Right now, we don’t know if that’s possible. Our national association (NASFAA) is asking ED for clarification, and we’ll share more as soon as we know.
Loan Proration for Part-Time Students
The bill includes a provision to prorate loan amounts based on enrollment. This could mean that part-time graduate students (e.g., those enrolled half-time) would only be eligible for half of the annual loan limit. If true, this would significantly impact part-time students.
We are waiting on clarification from ED on how this will be applied to both graduate and undergraduate students.
Major Changes to Repayment Plans
For new loans disbursed after July 1, 2026, the bill eliminates current income-driven repayment plans (IBR, PAYE, SAVE) and replaces them with a new Repayment Assistance Program (RAP):
- Students with loans from both before and after this date may find themselves repaying under two separate sets of rules.
- The good news: RAP borrowers will not be locked into a 30-year plan. They can switch to a standard 10- or 25-year plan if they choose.
- Current borrowers who want to stay in an income-driven plan must enroll by June 30, 2028. Those who don’t will be automatically moved into RAP.
We’ll share more about RAP once ED releases more guidance, including examples of how it could affect monthly payments and long-term costs.
What’s Next?
Our office is closely tracking all of these changes and will be updating this site to help students and alumni understand what these changes may mean for their financial aid. As soon as we have more concrete answers from ED and NASFAA, we’ll post updates..
In the meantime:
- There is no change to financial aid for the 2025–26 academic year.
- If you’re starting a new graduate program before July 1, 2026, you may still be eligible for GradPLUS under the current rules.
- We understand this is a lot to take in, and we’re here to support you as we all learn more.
The National Association of Student Financial Aid Administrators has put together a helpful chart that reviews all the provisions of the reconciliation bill. That can be found here