Calculate your federal student loan limits under the new 2026 rules — Grad PLUS loans end July 2026
Max Federal Borrowing
$27,000
Funding Gap
$73,000
Monthly Payment
$307
Total Interest
$9,839
Important: Grad PLUS loans eliminated July 2026
New federal limits apply. Graduate and professional students can no longer borrow up to the full cost of attendance.
Dependent Undergrad — Aggregate limit: $31,000
4
years
$
$
Existing federal student loans reduce your remaining aggregate limit
Max Federal Borrowing
$27,000
over 4 years · 6.53% rate
Funding Gap
$73,000
Monthly Payment
$307
Total Interest
$9,839
Funding Breakdown
Total Needed$100,000
Federal Loans$27,000
Funding Gap$73,000
Federal (27%)Gap (73%)
Repayment Estimate (10-Year Standard)
Monthly Payment
$307
Total Repaid
$36,839
Total Interest
$9,839
Repayment Term
10 years
Based on total federal debt of $27,000 at 6.53% interest. Does not include any private loans needed to cover the funding gap.
What Changed in 2026
Grad PLUS Loans Eliminated
The One Big Beautiful Bill Act (OBBBA) ended Grad PLUS loans starting July 1, 2026. Previously, grad students could borrow up to the full cost of attendance.
New Caps Apply
Graduate students: $20,500/year. Professional students (medical, dental, law): $33,000/year. Both in Direct Unsubsidized loans only.
Funding Gaps Likely
Students at expensive programs ($40K-$80K+/year) may need private loans, assistantships, or scholarships to cover costs previously funded by PLUS loans.
Frequently Asked Questions
Q
What happened to Grad PLUS loans in 2026?
The One Big Beautiful Bill Act (OBBBA) eliminated Grad PLUS loans starting July 1, 2026. Previously, graduate and professional students could borrow up to the full cost of attendance through Grad PLUS loans. Now they're limited to Direct Unsubsidized loans: $20,500/year for graduate students and $33,000/year for professional students (medical, dental, law). This creates potential funding gaps for students at expensive programs.
Grad PLUS loans ended July 1, 2026 under the One Big Beautiful Bill Act (OBBBA)
Previously, Grad PLUS covered up to 100% of cost of attendance (no cap)
New cap: $20,500/year for graduate students, $33,000/year for professional students
A law student at a $60K/year school now faces a $27,000 annual funding gap
Existing Grad PLUS loans are unaffected — only new originations after July 2026
Q
What are the new federal student loan limits for 2026?
For 2026-27: Dependent undergrads can borrow $5,500-$7,500/year (aggregate $31,000). Independent undergrads: $9,500-$12,500/year (aggregate $57,500). Graduate students: $20,500/year in Direct Unsubsidized loans (aggregate $138,500 including undergrad). Professional students: $33,000/year (aggregate $224,000). The key change is graduate/professional students can no longer use PLUS loans to cover remaining costs.
Graduate: $20,500/year Direct Unsubsidized; aggregate $138,500 (including undergrad debt)
Professional (medical, dental, law): $33,000/year; aggregate $224,000
Parent PLUS loans for undergrads are not affected — still available up to cost of attendance
Student Type
Annual Limit
Aggregate Limit
Interest Rate (2025–26)
Dependent Undergrad (Yr 1)
$5,500
$31,000
6.53%
Independent Undergrad (Yr 1)
$9,500
$57,500
6.53%
Graduate
$20,500
$138,500
8.06%
Professional
$33,000
$224,000
8.06%
Q
How do I cover a funding gap without Grad PLUS loans?
Options to fill the gap: 1) Private student loans (rates vary, 4-14% in 2026). 2) Graduate assistantships with tuition waivers (save $15-40K/year). 3) Employer tuition reimbursement ($5,250/year tax-free). 4) Scholarships and fellowships. 5) Income from part-time work. 6) Savings and family contributions. Private loans lack federal protections like income-driven repayment, so exhaust scholarships and assistantships first.
Employer tuition reimbursement: up to $5,250/year tax-free under IRS Section 127
Private student loans: rates 4–14% in 2026, but no income-driven repayment or forgiveness
Fellowships and scholarships: search FastWeb, Scholarship America, and department-specific awards
Part-time work during grad school: 10–20 hrs/week can cover $8–15K/year
Funding Source
Annual Amount
Key Tradeoff
Graduate assistantship
$15–40K (tuition waiver)
20 hrs/week work required
Employer tuition reimbursement
$5,250 tax-free
Must maintain employment
Private student loans
Up to cost of attendance
No federal protections
Fellowships/scholarships
$5–50K
Competitive, application process
Part-time work
$8–15K
Reduced study time
Q
What is the interest rate on federal student loans in 2026?
For the 2025-26 academic year, Direct Unsubsidized loan rates are 6.53% for undergraduate students and 8.06% for graduate/professional students. Rates are set each July based on the 10-year Treasury note auction. Without Grad PLUS, graduate students no longer face the even higher PLUS rate (which was 9.08%) — the 8.06% Direct Unsubsidized rate is actually lower.
Undergraduate Direct Unsubsidized: 6.53% fixed (2025–26 academic year)
Graduate/Professional Direct Unsubsidized: 8.06% fixed (2025–26)
Old Grad PLUS rate was 9.08% — elimination actually saves 1.02% on interest
Rates reset each July based on the 10-year Treasury note plus a fixed margin
No origination fee on Direct Unsubsidized loans (PLUS had a 4.228% fee)
Q
Are current Grad PLUS loans affected by the 2026 changes?
No, existing Grad PLUS loans are not affected. The elimination only applies to new loan originations after July 1, 2026. If you already have Grad PLUS loans, your terms remain unchanged. Students currently enrolled may want to borrow their remaining Grad PLUS amounts before the July 2026 deadline if they'll need the additional funding.
Existing Grad PLUS loans keep their original terms, rates, and repayment options
Income-driven repayment (IDR) plans still apply to existing Grad PLUS balances
PSLF (Public Service Loan Forgiveness) still covers existing Grad PLUS loans
Students enrolled before July 2026 can borrow remaining PLUS amounts before the cutoff
Consolidation of existing Grad PLUS into Direct Consolidation is still available
Example Calculations
1Graduate Student — $40K/Year Program
Inputs
Degree TypeGraduate
Years Remaining2
Annual Tuition$40,000
Current Balance$25,000
Result
Funding Gap$39,000
Max Federal$41,000
Total Needed$80,000
Monthly Payment$802
A graduate student with 2 years remaining at $40K/year can borrow $41,000 in federal loans ($20,500/year). With $80,000 total needed, there's a $39,000 gap that requires private loans or other funding. Monthly payment on $66,000 total debt (including $25K existing) would be about $802 over 10 years at 8.06%.
2Dependent Undergrad — 4 Years at $25K
Inputs
Degree TypeDependent Undergrad
Years Remaining4
Annual Tuition$25,000
Current Balance$0
Result
Funding Gap$73,000
Max Federal$27,000
Total Needed$100,000
Monthly Payment$307
A dependent undergrad can borrow up to $27,000 over 4 years in federal loans ($5,500 + $6,500 + $7,500 + $7,500). With $100,000 total cost, there's a $73,000 gap to fill via parent PLUS loans, scholarships, or savings. Monthly payment on $27K would be about $307 at 6.53%.
3Law Student — $55K/Year, 3 Years
Inputs
Degree TypeProfessional
Years Remaining3
Annual Tuition$55,000
Current Balance$30,000
Result
Funding Gap$66,000
Max Federal$99,000
Total Needed$165,000
Monthly Payment$1,569
A law student can borrow $99,000 over 3 years ($33,000/year) in federal loans. At $55K/year, the total cost is $165,000, leaving a $66,000 gap. With $30K existing debt, total debt of $129K means monthly payments around $1,569 over 10 years at 8.06%.
Formulas Used
Federal Loan Maximum
Max Federal = min(Σ Annual Limits, Aggregate Limit - Current Balance)
Your maximum federal borrowing is the lesser of your remaining annual limits or the aggregate cap minus existing federal loan balance.
Where:
Annual Limits= Per-year borrowing limit based on degree type and year in school ($)
Aggregate Limit= Lifetime federal loan cap ($31K-$224K depending on degree)
Current Balance= Existing federal student loan balance ($)
Monthly Loan Payment (Standard 10-Year)
Payment = P × [r(1+r)¹²⁰] / [(1+r)¹²⁰ - 1]
Standard 10-year repayment using the amortization formula. This is the default federal repayment plan.
Where:
P= Total loan principal (current balance + new borrowing) ($)
r= Monthly interest rate (annual rate ÷ 12)
120= Total payments over 10-year standard repayment term
2026 Student Loan Changes: New Limits, Funding Gaps, and What to Do
1
Grad PLUS Loan Elimination: What Happened and Why It Matters
$20,500 per year — that is the new maximum a graduate student can borrow in federal loans after the One Big Beautiful Bill Act (OBBBA) eliminated Grad PLUS loans effective July 1, 2026. Previously, Grad PLUS loans covered up to 100% of the cost of attendance with no dollar cap, allowing graduate students at $60,000–$80,000/year programs to borrow the full amount from the federal government.
The impact varies dramatically by program cost. A graduate student at a state university charging $15,000/year in tuition faces no funding gap — the $20,500 annual limit exceeds their need. But a law student at a $60,000/year private school now confronts a $27,000 annual gap ($60,000 − $33,000 professional limit), totaling $81,000 over a 3-year program that must be filled through private loans, scholarships, or other sources.
Professional students (medical, dental, law) receive a higher annual limit of $33,000/year with a $224,000 aggregate cap — significantly more than the $20,500/$138,500 available to other graduate students. However, medical school tuition averaging $55,000–$65,000/year at private institutions still leaves a $22,000–$32,000 annual gap. Current students enrolled before July 2026 should consider borrowing remaining Grad PLUS amounts before the deadline.
*Gap calculated against $50,000/year cost of attendance
Student Type
Annual Limit
Aggregate Limit
Typical Gap at $50K/yr
Dependent Undergrad
$5,500–$7,500
$31,000
$42,500–$44,500
Independent Undergrad
$9,500–$12,500
$57,500
$37,500–$40,500
Graduate
$20,500
$138,500
$29,500
Professional
$33,000
$224,000
$17,000
Tip: Students currently enrolled can borrow remaining Grad PLUS amounts before the July 1, 2026 cutoff — existing loans keep their original terms.
2
Federal Loan Limits Under the 2026 Rules
$5,500 for a first-year dependent undergraduate, rising to $7,500 by year three — federal loan limits are tiered by year in school, dependency status, and degree level. Understanding your exact limit prevents overborrowing and helps you identify how much supplemental funding you need before classes begin.
Independent undergraduates receive significantly higher limits: $9,500 in year one, $10,500 in year two, and $12,500 in years three and four, with a $57,500 aggregate cap. The "independent" classification applies to students who are 24 or older, married, veterans, or have dependents of their own. A 4-year independent undergrad can borrow up to $45,000 in federal loans ($9,500 + $10,500 + $12,500 + $12,500), versus $27,000 for a dependent student.
Aggregate limits include all prior federal borrowing. A graduate student with $30,000 in undergraduate federal loans has only $108,500 remaining ($138,500 aggregate − $30,000 existing) — enough for about 5.3 years at the $20,500 annual rate. For professional students, $30,000 in prior debt leaves $194,000 of the $224,000 cap. Use the student loan calculator to model repayment on your projected total balance.
Dependent undergrad year 1: $5,500 ($3,500 subsidized + $2,000 unsubsidized)
Dependent undergrad year 2: $6,500 ($4,500 subsidized + $2,000 unsubsidized)
Dependent undergrad years 3–4: $7,500 each ($5,500 subsidized + $2,000 unsubsidized)
Independent undergrad year 1: $9,500 ($3,500 subsidized + $6,000 unsubsidized)
Graduate: $20,500/year in Direct Unsubsidized only (aggregate $138,500 including undergrad)
Professional (medical, dental, law): $33,000/year in Direct Unsubsidized (aggregate $224,000)
3
Filling the Funding Gap Without Grad PLUS Loans
$27,000 per year — that is the funding gap a law student at a $60,000/year school faces under the new 2026 rules. Multiplied across a 3-year program, the total gap reaches $81,000. Five primary strategies can fill this shortfall, each with distinct trade-offs between cost, flexibility, and long-term financial impact.
Graduate assistantships with tuition waivers represent the most cost-effective option, effectively eliminating $15,000–$40,000 per year in tuition while paying a $15,000–$25,000 annual stipend. They require 20 hours/week of work in teaching, research, or administration. Employer tuition reimbursement programs cover up to $5,250/year tax-free under IRS Section 127, though you must maintain employment while enrolled.
Private student loans fill the gap when other options fall short, but they carry significant trade-offs. Rates in 2026 range from 4% to 14% depending on credit score and cosigner availability, and private loans lack income-driven repayment options, forbearance protections, and Public Service Loan Forgiveness eligibility. A $81,000 private loan at 8% over 10 years costs $983/month versus the federal rate of 8.06% — similar in rate, but without the federal safety net.
Funding Source
Annual Amount
Key Benefit
Key Risk
Graduate assistantship
$15K–$40K
Tuition waiver + stipend
20 hrs/week commitment
Employer reimbursement
$5,250 tax-free
No debt created
Must maintain job
Fellowships/scholarships
$5K–$50K
No repayment required
Competitive application
Private student loans
Up to full gap
Immediate access
No federal protections
Part-time work
$8K–$15K
No debt
Reduced study time
Tip: Exhaust scholarships, assistantships, and employer reimbursement before turning to private loans — private debt lacks the federal safety net of income-driven repayment and forgiveness.
4
Interest Rates and Repayment Under the New Rules
8.06% fixed — that is the 2025–26 interest rate on Direct Unsubsidized loans for graduate and professional students, actually lower than the old Grad PLUS rate of 9.08%. This 1.02 percentage point difference means the new system, while limiting total borrowing, charges less interest on each dollar borrowed. On a $66,000 balance, the rate savings equals approximately $5,400 over a 10-year repayment term.
Standard 10-year repayment on $66,000 at 8.06% produces monthly payments of approximately $802. Income-driven repayment (IDR) plans remain available for federal Direct Unsubsidized loans, capping payments at 5–10% of discretionary income under the SAVE plan. A graduate earning $55,000 with $66,000 in federal debt would pay roughly $234/month under SAVE — less than one-third of the standard payment — with forgiveness of remaining balance after 20–25 years.
Public Service Loan Forgiveness (PSLF) still applies to federal Direct Unsubsidized loans. A teacher, government employee, or nonprofit worker making 120 qualifying payments (10 years) on income-driven repayment receives forgiveness of the remaining balance tax-free. On $66,000 borrowed, PSLF could forgive $30,000–$40,000 if payments are income-driven. Use the debt payoff calculator to compare repayment strategies.
1
Determine your total federal loan balance
Add existing undergraduate federal debt to projected new borrowing. A graduate with $25,000 existing debt borrowing $20,500/year for 2 years will owe $66,000 total in federal loans.
2
Choose a repayment plan
Standard 10-year plan: $802/month on $66K at 8.06%. Income-driven (SAVE): 5–10% of discretionary income, as low as $234/month on $55K salary. Extended 25-year: $516/month but $88,800 in total interest.
3
Calculate the funding gap
Subtract your federal annual limit from total cost of attendance. For $40,000/year programs with $20,500 federal limit, the gap is $19,500/year. Multiply by years remaining for total gap.
4
Model private loan costs separately
Private loans at 7–10% without IDR protections require separate repayment planning. A $39,000 private loan at 8% over 10 years costs $473/month with $17,760 in total interest.
5
Planning Ahead: Strategies for Incoming Graduate Students
62% of graduate students borrowed Grad PLUS loans before the 2026 elimination — those students now need alternative funding strategies. The most effective approach combines institutional aid negotiation with strategic program selection. Contacting your school’s financial aid office early and asking about assistantships, fellowships, and tuition reduction programs can close $10,000–$40,000 of the annual gap before considering loans.
Program selection becomes a more critical financial decision under the new rules. A $25,000/year state university program with full federal coverage versus a $60,000/year private program requiring $27,000+ in private loans annually can mean the difference between $0 and $81,000 in private debt. The ROI of a prestigious program must now be weighed against the higher cost of private borrowing without federal protections.
Starting a dedicated education savings fund even 12–24 months before enrollment can offset part of the gap. Setting aside $1,000/month for 2 years yields $24,000 — enough to cover one full year of the typical funding gap at a professional school. Combined with a graduate assistantship and federal loans, this three-pronged approach can eliminate or minimize the need for private debt entirely.
Negotiate institutional aid early — contact financial aid offices 6–12 months before enrollment to explore assistantships and grants
Compare total cost across programs — a $25K/year state school with full federal coverage saves $81K+ in private debt vs a $60K/year school
Build education savings — $1,000/month for 24 months provides $24,000 to offset the first-year gap
Apply broadly for fellowships — NSF, NIH, and discipline-specific fellowships cover $25K–$50K/year
Consider part-time enrollment — working while studying part-time stretches federal limits across more years, reducing annual gap
This calculator is provided for informational and educational purposes only. Results are estimates and should not be considered professional financial, medical, legal, or other advice. Always consult a qualified professional before making important decisions. UseCalcPro is not responsible for any actions taken based on calculator results.