Grad PLUS loans are gone and new borrowing caps apply now that One Big Beautiful Bill Act provisions took effect July 1.
The takeaway
Federal student loan rules changed significantly on July 1, 2026 under the One Big Beautiful Bill Act: Grad PLUS loans are eliminated, graduate borrowing is capped at $100,000 lifetime, professional students face a $200,000 cap, and Parent PLUS loans are limited to $65,000 total. New repayment plans and an autopay rate-reduction incentive also began.
Federal student loan rules changed significantly on July 1, 2026, as provisions from the One Big Beautiful Bill Act took effect, reshaping how much students and parents can borrow and how new borrowers will repay their loans, according to an August 4 report from Chicago PBS station WTTW.
New borrowing limits
- Graduate students: $20,500 annual cap, $100,000 lifetime cap; Grad PLUS loans have been eliminated entirely
- Professional students (medicine, law, etc.): $50,000 annual cap, $200,000 lifetime cap — down from the prior standard of full cost of attendance, which could run about $60,000 a year for medical school
- Parent PLUS loans: $20,000 annual cap, $65,000 lifetime cap per student, applying to parents of students enrolling after July 1, 2026
New repayment options for new borrowers
Borrowers taking out federal loans for the first time after July 1 can choose between a Tiered Standard Plan, with repayment terms of 10 to 25 years depending on loan balance, or a new Repayment Assistance Plan (RAP) that sets monthly payments at 1% to 10% of income, with a $10 minimum, a $50 reduction per dependent, and loan cancellation after 30 years of payments. Existing borrowers will transition to these or income-based options starting in July 2028.
An incentive for autopay
Borrowers who enroll in automatic payments by September 30, 2026 qualify for a 1-percentage-point interest rate reduction that runs through June 30, 2028, according to the report.
Why it matters
These changes mainly affect new and incoming graduate, professional and parent borrowers — undergraduate direct loan limits aren't covered. If you're planning to borrow for a graduate or professional program starting this fall, check the new caps against your expected costs before enrolling.
Why you can trust this article
Written and edited in-house by the THRYV Life Desk. We do not republish or reword agency copy, and we do not invent quotes, statistics, testimonials or ratings. Where figures move frequently, we point you to the primary release rather than printing a number that will be out of date. Advertising and affiliate partnerships have no influence on our reporting — see our editorial standards, fact-checking policy and affiliate disclosure. Spotted an error? Write to newsroom@thryv-news.com.
General information only. Not personalised financial, medical or legal advice.
