Grad PLUS Ended on 1 July 2026: Federal Loan Limits for US Postgraduate and Professional Programmes

Since 1 July 2026, graduate and professional students in the US federal loan system may not take out Direct PLUS (Grad PLUS) Loans. Students already enrolled on 30 June 2026 who had received a Direct Loan for that programme keep the old rules for their expected time to credential. Everyone else borrows under new Direct Unsubsidized limits: $20,500 a year and $100,000 overall for graduate students, $50,000 a year and $200,000 overall for professional students.

Who this concerns on this side of the Atlantic

Federal Direct Loans are only for students eligible for US federal aid, which the FSA Handbook limits to US citizens and certain classes of noncitizens (the detailed categories are not covered by the sources used here). In practice, this article is for American or dual-national graduates in the UK weighing a US master's, a J.D. or an M.D., for parents funding that move, and for advisers who help them plan the budget.

The legal basis is Public Law 119-21, the Working Families Tax Cuts Act signed on 4 July 2025 (previously referred to by the Department of Education as the One Big Beautiful Bill Act), implemented by a final rule published in the Federal Register on 1 May 2026 and in force from 1 July 2026. The key provision is 34 CFR 685.200(b)(2): beginning on 1 July 2026, a graduate student or professional student may not borrow a Direct PLUS Loan.

Three questions to place yourself

1. Were you enrolled in the programme on 30 June 2026? If not, Grad PLUS is closed to you and the new caps apply.
2. Was a Direct Loan disbursed for that programme before 1 July 2026? A cancelled loan does not count; one disbursed and later repaid does.
3. Are you still within your expected time to credential? That is the lesser of three academic years or the programme length minus what you have already completed. If yes to all three, the pre-July 2026 rules continue to apply to you.

The final rule's preamble adds conditions that frequently catch students out. Officially withdrawing, or withdrawing and re-enrolling in the same programme, ends the exception. Moving to a different graduate programme at the same institution counts as withdrawing. Transferring to another institution is a new programme of study, even in the same field. An approved leave of absence and an optional summer term do not break enrolment, and a change of concentration within the same 4-digit CIP code, credential level and institution is permitted. Students cannot opt out of the exception to reach the higher professional limit.

The new limits side by side

For reference, under the pre-July 2026 rules the graduate aggregate for Direct Unsubsidized was $138,500 including undergraduate loans, and Grad PLUS could cover up to the cost of attendance minus other financial assistance. The annual graduate figure of $20,500 is not new: the final rule points out that all graduate and professional students were limited to $20,500 a year in Direct Unsubsidized Loans before the Act. What is new is the higher professional tier and the disappearance of Grad PLUS above it.

Is your programme professional?

Only a professional student gets the $50,000 and $200,000 limits. The definition now in 34 CFR 685.102 requires a degree that marks the academic requirements for beginning practice in a profession, is generally doctoral with at least six academic years of postsecondary study (including at least two post-baccalaureate), generally requires professional licensure, and sits in the same CIP intermediate group as the fields the regulation lists:

• Medicine (M.D.) and Osteopathic Medicine (D.O.)
• Law (L.L.B. or J.D.)
• Dentistry (D.D.S. or D.M.D.), Pharmacy (Pharm.D.), Veterinary Medicine (D.V.M.)
• Optometry (O.D.), Podiatry (D.P.M., D.P., or Pod.D.), Chiropractic (DC or DCM)
• Theology (M.Div. or M.H.L.) and Clinical Psychology (Psy.D. or Ph.D.)

Combined programmes are treated as professional only if more than 50% of the credit hours count towards the professional degree. Many commenters on the rule objected that programmes such as nursing or social work fell under the graduate tier; the Department replied that the label reflects only the statutory definition for loan limits, not a judgement on any profession. Confirm your programme's classification with the US institution before relying on a figure.

Building a realistic funding plan

A quick calculation shows the gap the change can create. A full-time, two-year US master's under the new rules allows at most $20,500 x 2 = $41,000 in Direct Unsubsidized Loans. For a professional programme, take a four-year M.D. as the example: $50,000 x 4 = $200,000, which reaches the professional aggregate exactly, so any amount already counted against that cap would leave less room.

• Cost of attendance still applies. No Direct Loan may exceed the cost of attendance minus other financial assistance.
• Part-time study reduces the cap. Annual limits fall in direct proportion to less than full-time enrolment.
• Institutions may go lower. Since 1 July 2026 a school may set a lower limit for a programme if it applies it to every student in that programme, documents it and publishes it, including in award notifications.
• Repayment is different for new loans. Direct Loans made on or after 1 July 2026 are repaid under the Tiered Standard plan or the Repayment Assistance Plan (34 CFR 685.210).

For parents funding an undergraduate degree instead

Families sometimes look at Parent PLUS as an alternative route. It changed on the same date. For periods of enrolment beginning on or after 1 July 2026, all parents together may borrow at most $20,000 a year and $65,000 in total in Direct PLUS Loans for each dependent undergraduate (34 CFR 685.203(f) and (g)). As with Grad PLUS, the old rules continue during the student's expected time to credential if the student was enrolled on 30 June 2026 and a Direct Loan had already been made for that programme.

Parent PLUS also has a credit check. Under 34 CFR 685.200(c), a parent has an adverse credit history if, among other things, they have debts with a combined outstanding balance above $2,085 that are 90 or more days delinquent, or that were placed in collection or charged off during the two years before the credit report. Graduate students who still qualify for Grad PLUS under the interim exception face the same parent-style credit requirements.

For a precise reading of your case, the Kopik base on US federal student aid answers questions such as whether a student already enrolled before July 2026 can keep using Grad PLUS until graduation, quoting 34 CFR and the final rule.

Sources: 34 CFR 685.200 and the final rule of 1 May 2026. The new caps sit in the rule's amendments to 34 CFR 685.203; the eCFR display of that section, current to 1 October 2026, notes that part of this amendment could not be incorporated, so the Federal Register text is the reference. General information, not financial advice.