Grad PLUS Loans Are Gone Starting July 1: How to Actually Pay for Grad School Now

If you were planning to use Grad PLUS loans to fund the bulk of your graduate program, that plan is dead. The One Big Beautiful Bill Act eliminates Grad PLUS Loans for new borrowers starting July 1, 2026.

For decades, Grad PLUS was the easy answer for anyone trying to fund med school, law school, or an expensive master's. You could borrow up to the full cost of attendance, no credit-based denial for most applicants, no co-signer required. That option is over.

Here's what graduate students can still borrow from the federal government, what the gap looks like, and how to fill it without ending up with a private loan you regret.

What Used to Be Available (RIP Grad PLUS)

Until July 1, 2026, graduate students could stack federal borrowing like this:

• Direct Unsubsidized Loan: up to $20,500 per year
• Grad PLUS Loan: up to the full remaining cost of attendance, minus any other aid received

So a grad student at a $70K-per-year program could borrow $20,500 unsubsidized, then use Grad PLUS to cover the remaining $49,500. The federal government effectively underwrote the whole degree.

That's the system that's ending.

What's Left Under the New Rules

Starting July 1, 2026, here's your federal toolkit as a graduate or professional student:

For grad students (master's, PhD, most academic programs):

• $20,500 per year in Direct Unsubsidized Loans
• $100,000 lifetime cap for graduate-level borrowing (not counting undergrad)
• That's it. No Grad PLUS to fill the gap.

For professional students (med, dental, law, vet, pharmacy):

• $50,000 per year in Direct Unsubsidized Loans (a meaningful bump for this category)
• $200,000 lifetime cap for the professional program
• Also no Grad PLUS.

The professional-student bucket is bigger because Congress recognized that med school and dental school costs simply blow past what an academic master's costs. But $200K still doesn't cover the full ticket at most private medical schools, which can run $350K to $400K all-in across four years.

The Funding Gap, in Real Numbers

Let's do the math for three common scenarios.

Scenario 1: $90K MBA at a top-25 program. Total cost of attendance roughly $180K across two years. You can borrow $20,500 per year in unsubsidized loans, for $41,000 total. The gap: $139,000. That's coming from savings, scholarships, employer sponsorship, or private loans.

Scenario 2: Private med school, $90K per year, four years. Total cost: $360K. You can borrow $50,000 per year in unsubsidized, for $200,000 total. The gap: $160,000. Same options to fill it.

Scenario 3: Public-flagship MA program, $30K per year, two years. Total cost: $60K. You can borrow $20,500 per year, for $41,000 total. The gap: $19,000. Much more manageable.

If you're looking at scenarios 1 or 2, the path forward almost certainly involves private loans, serious scholarship hunting, or both.

How to Fill the Gap (Best to Worst Options)

In order of how much they'll cost you over time:

1. Scholarships and fellowships (free money, hardest to get). Almost every grad program has merit aid, departmental funding, and outside fellowships. PhD programs are often fully funded. Master's and professional programs typically aren't, but partial scholarships are common. Apply to anything you're remotely qualified for.

2. Employer tuition assistance. Big firms in consulting, tech, healthcare, and finance often pay for grad school in exchange for a multi-year work commitment. The math usually works in your favor even if you stay only the minimum required time.

3. Teaching assistantships and research assistantships. A TA or RA position typically covers some or all of your tuition plus a small stipend. Standard for PhDs, less common for professional programs.

4. Family contribution. If your family can help, it's cheaper than borrowing. Even a partial contribution reduces the loan principal you'll spend years paying off.

5. Private student loans. The most likely path for the gap. Private grad loans can cover up to the full cost of attendance minus other aid, similar to what Grad PLUS used to do. The catch: rates depend on your credit (or your co-signer's), and private loans don't come with federal protections like income-driven repayment or PSLF eligibility.

6. Home equity or personal loans. Rarely the right move. Higher rates than dedicated student loan products, and you may be putting your house on the line. Avoid unless you've exhausted everything else.

What to Look For in a Private Grad Loan

If you're going the private route, four things matter more than the brand name on the loan:

Fixed vs. variable rate. Fixed rates are usually safer for grad school borrowers because you'll be in school for two to four years before repayment starts, and you don't want a rate that climbs while you're not earning. Variable rates start lower but introduce real uncertainty.

In-school payment options. Some lenders require interest-only payments while you're in school. Some let you defer everything until graduation. Deferred is more expensive overall (interest accrues), but easier on cash flow while you're studying. Pick based on your situation, not the cheaper headline rate.

Co-signer requirements and co-signer release. If you need a co-signer to qualify or to get a decent rate, check whether the lender offers co-signer release after a certain number of on-time payments. Some do, some don't.

Repayment term flexibility. Longer terms mean lower monthly payments but higher total interest. Most grad school borrowers should pick the shortest term they can comfortably afford, because grad school debt compounds fast.

The Public Service Loan Forgiveness Question

One real downside of leaving federal loans: PSLF. If you're planning to work in public service (government, qualifying nonprofit, certain healthcare), 120 qualifying federal loan payments get your remaining balance forgiven.

Private loans don't qualify for PSLF. So if your career plan involves public service, every dollar you borrow privately is a dollar you can't get forgiven later.

That doesn't mean don't borrow privately. It does mean: maximize the federal $20,500-or-$50,000 first (those dollars could be forgiven), and only go private for the gap that's left.

What to Do This Week

1. If you have a 2025-26 disbursement already, check whether you qualify for the legacy provision. Current Grad PLUS borrowers may have a grandfather window. Your financial aid office can confirm.
2. If you're starting grad school in fall 2026, run the four-year cost math now. Don't wait until August. Total cost minus scholarships minus federal max equals what you'll need from private loans, family, or other sources.
3. Get pre-qualified private loan rates this summer. Soft credit pulls don't hurt your score, and knowing your real cost ahead of time lets you decide whether the program is still worth it at that price.
4. Aggressively re-attack scholarships. Anything you can pull in as free money reduces your borrowing by a dollar each. Departmental funding deadlines often run through summer.

Bottom Line

Grad PLUS made grad school feel like a federally-funded entitlement. It wasn't free, but it was easy. The new rules force a conversation that probably should've been happening all along: is this program worth the actual cost?

For some students, the answer is still yes, and private loans plus a tight scholarship strategy will get you there. For others, it's a reason to look at a cheaper program, a different timeline, or a different path entirely.