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Direct Loan Limits 2026-27: Undergraduate and Graduate Caps, End of Grad PLUS

The Working Families Tax Cuts Act changed federal borrowing limits for periods of enrollment beginning on or after July 1, 2026. This page sums up the annual and aggregate limits set out in 34 CFR 685.203 and 685.200.

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Answers are written by a language model solely from this base's documents, with numbered sources. They can be wrong and aren't legal, medical or financial advice: check the sources before any important decision.

Undergraduate annual and aggregate limits

A dependent undergraduate who has not completed the first year can borrow up to $3,500 in Direct Subsidized Loans, plus $2,000 in Direct Unsubsidized Loans, for a program of at least a full academic year. The subsidized limit rises to $4,500 in the second year and $5,500 afterwards.

Independent students, and dependent students whose parents are unlikely to obtain a PLUS loan because of exceptional circumstances, can borrow an additional unsubsidized amount: $6,000 in the first and second years and $7,000 afterwards.

Aggregate limits are $31,000 for a dependent undergraduate and $57,500 for an independent undergraduate, with no more than $23,000 in subsidized loans.

Graduate, professional and lifetime caps

For periods of enrollment beginning on or after July 1, 2026, graduate students can borrow up to $20,500 per year with a $100,000 aggregate limit. Professional students can borrow up to $50,000 per year with a $200,000 aggregate limit.

A student in a program awarding both a graduate and a professional degree is treated as a professional student if more than 50% of the credit hours count toward the professional degree. A lifetime maximum of $257,500 also applies, excluding PLUS loans taken as a parent.

Grad PLUS and Parent PLUS after July 1, 2026

From July 1, 2026, graduate and professional students may not borrow a Direct PLUS Loan. An exception applies to a student enrolled in a program as of June 30, 2026 who received a Direct Loan for that program before July 1, 2026, for their expected time to credential.

Parents can borrow up to $20,000 per year per dependent student in Direct PLUS Loans, with a $65,000 aggregate per dependent student regardless of amounts repaid or forgiven.

Frequently asked questions

What is the expected time to credential?

It is the lesser of three academic years or the difference between the program length and the part of the program the student had completed as of June 30, 2026. The Grad PLUS exception ends if the student withdraws or stops being enrolled in the program.

Are loan limits reduced for part-time students?

Yes. When a student in a term-based program is enrolled less than full time, the Direct Loan amount is reduced in direct proportion to the degree to which the student is not enrolled full time.

What was the graduate aggregate limit before July 1, 2026?

For periods of enrollment beginning before July 1, 2026, the aggregate limit for a graduate or professional student was $138,500, including loans for undergraduate study. The new $100,000 and $200,000 caps apply to periods beginning on or after July 1, 2026.

What counts as exceptional circumstances for the extra unsubsidized amount?

Examples in the regulation include a parent who receives only public assistance or disability benefits, a parent who is incarcerated, or a parent with an adverse credit history. The financial aid administrator must review the family's financial information and document the decision in the school's file.

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