Important News Regarding Financial Aid

The Recent Reconciliation Bill: What We Know So Far

What We Know:

Federal Direct Grad PLUS Loans are Being Phased Out

• Starting July 1, 2026, new borrowers will no longer be eligible for the Federal Grad PLUS Loans.
• However, if you are enrolled in your current program and have borrowed a Grad PLUS Loan before July 1, 2026, you will still be able to access Grad PLUS for up to three (3) additional years or until your program ends—whichever comes first.
• This legacying applies only to loans borrowed for your current program. If you borrowed Grad PLUS Loans 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:

• Graduate students may borrow up to $20,500 per year, with a lifetime limit of $100,000.
• If you have borrowed an Federal Unsubsidized Loan in your current program of study, you will continue to qualify for the existing Unsubsidized Loan limits along with the Grad PLUS Loan (if you have also borrowed a Grad PLUS Loan in your existing program of study) for an additional three 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, Federal 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.
• For Parent PLUS Loan borrowers who have borrowed for their students prior to July 1, 2026, the parent borrower can continue to borrow the Parent PLUS Loan at the current (pre-July 1, 2026) borrowing levels for up to an additional three years or the end of the 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):

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 the US Department of Education (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 who have borrowed loans prior to July 1, 2026, and will borrow a new loan after July 1, 2026, are limited to the new RAP or the standard plans. 
• 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 do not borrow a loan after July 1, 2026, and 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 the National Association of Student Financial Aid Administrators (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 Grad PLUS 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.

NASFAA has put together a helpful chart that reviews all the provisions of the reconciliation bill. That can be found HERE.