- Parent PLUS: now $20,000 a year, $65,000 total per student (new borrowers).
- Grad PLUS: gone for new borrowers. Grad students: $20,500 a year; professional students: $50,000 a year.
- New lifetime cap: $257,500 on federal student loans (Parent PLUS excluded).
If your family borrowed a federal loan for the current program before July 1, 2026, the old rules may still cover you for up to three more years — otherwise, plan for the gap now.
See your family’s gap for next year and for the rest of the degree →
Limits per the One Big Beautiful Bill Act, effective July 1, 2026. Verified against Dept. of Education guidance on .
College Funding Gap Calculator
Answer a few questions and this tool shows which rules likely cover you, how much federal money is available, and what is left for your family to fill.
Not sure if your degree counts as professional? See the list and court update below and ask your aid office.
The student must also have been enrolled in that program on June 30, 2026. A high school senior starting college in 2027 answers No.
Same school and same credential level. ED’s FAQ says changing majors inside one credential is not a program change; confirm with your aid office.
Nothing you type is saved or sent anywhere. Please don’t enter names, Social Security numbers, FSA IDs or school names.
What Changed on July 1, 2026
Four things changed: Parent PLUS now has a yearly and a total cap, Grad PLUS closed to new borrowers, graduate and professional students got new caps, and most federal loans now share a lifetime ceiling.
Undergraduate Direct Loan limits did not change. The changes land hardest on parents of dependent students and on anyone starting graduate school.
This guide labels every situation with one of three tiers:
OLD RULES APPLY — the student qualifies for the legacy provision.
NEW CAPS APPLY — the federal limits that began July 1, 2026.
GAP TO FILL — the amount above what federal loans can cover.
| Loan | Before July 1, 2026 | From July 1, 2026 | Who’s grandfathered |
|---|---|---|---|
| Parent PLUS | Up to cost of attendance minus other aid. No total limit. | $20,000 a year and $65,000 total per dependent student, all parents combined. | Parents of students who qualify for the legacy provision, for up to 3 academic years. |
| Grad PLUS | Up to cost of attendance minus other aid. | Closed to new borrowers. Existing Grad PLUS loans are unchanged. | Legacy students may keep borrowing under the old rules for up to 3 academic years. |
| Graduate unsubsidized (non-professional) | $20,500 a year; $138,500 total, counting undergraduate loans. | $20,500 a year; $100,000 total. Undergraduate loans are not counted. | Legacy students, under the old limits. |
| Professional unsubsidized | $20,500 a year ($40,500 for certain health professions); $224,000 total for those programs. | $50,000 a year; $200,000 total. ED decides which degrees qualify. | Legacy students, under the old limits. |
| Undergraduate, dependent | $5,500 / $6,500 / $7,500 / $7,500 a year by year in school; $31,000 total. | Unchanged. | Not needed. |
| Undergraduate, independent | $9,500 / $10,500 / $12,500 / $12,500 a year; $57,500 total. | Unchanged. | Not needed. |
| Lifetime cap (new) | No single lifetime ceiling. | $257,500 on federal student loans. Counts undergraduate and Grad PLUS loans; excludes Parent PLUS. | Legacy students are exempt during the exception; loans borrowed then count once the cap applies. |
Rules that sit on top of the table
- Part-time enrollment: annual Direct Loan limits are reduced in proportion to how much of a full-time load the student takes, starting with the 2026–27 award year. ED’s FAQ says this applies to legacy borrowers too.
- Lower school limits: since July 1, 2026, a school may set lower annual limits for specific programs, as long as it applies them consistently. ED’s June 26, 2026 Dear Colleague letter explains the authority.
- When a parent is denied: if a parent is denied a PLUS loan because of adverse credit, the dependent student can borrow at the higher independent-student amounts. Reaching the $65,000 total does not unlock those amounts.
The Lifetime Cap — and What Counts Toward It
The $257,500 cap counts what a student borrows in their own name, undergraduate and graduate together, but not Parent PLUS loans taken for a dependent student.
Grad PLUS loans count. Repaying, forgiving or discharging a loan does not free up room. Certain health professions loans, such as HEAL, are left out.
The graduate and professional totals ($100,000 and $200,000) work separately. They exclude undergraduate borrowing. The lifetime cap does not.
Example: an independent student who borrows the full $57,500 as an undergraduate and the full $200,000 as a professional student reaches $257,500 exactly. Nothing is left over.
The Parent PLUS $65,000 total is separate. It does not reset as the loans are repaid.
Do the Old Rules Still Cover You? The Legacy Provision
If the student was enrolled in the program on June 30, 2026, and a Direct Loan for it was disbursed before July 1, 2026, the old limits can continue for up to three academic years or until the program ends, whichever comes first.
ED calls this the interim exception. Schools and news stories call it the legacy provision. The status belongs to the student and the program, not to the family.
Check your status in five questions
- Was the student enrolled in this program on June 30, 2026?Yes: go to question 2.No: NEW CAPS APPLY. This includes high school seniors starting in 2027.
- Was a Direct Loan disbursed for this program before July 1, 2026 — to the student, or a Parent PLUS loan to a parent for this student?Yes: go to question 3.No: NEW CAPS APPLY.
- Has the student withdrawn from all coursework or stopped being enrolled since then?Yes: NEW CAPS APPLY. Dropping one course does not count, and an approved leave of absence does not count if the student returns to the same program within 180 days.No: go to question 4.
- Will the student stay in the same program at the same school?Yes: go to question 5.No: NEW CAPS APPLY. Not sure: ask your aid office before you switch.
- Is there time left?Yes: OLD RULES APPLY for the shorter of three academic years or the published program length minus the time already completed. After that, NEW CAPS APPLY.
How long it lasts
The exception does not guarantee three years. A student in a four-year program who finished two years before July 1, 2026 has two years left, not three. At the latest, it ends after the 2028–29 academic year.
What counts as “the same program”
ED defines an undergraduate program by the school and the credential level. Graduate and professional programs also use a more specific field-of-study code. ED’s May 20, 2026 loan limits FAQ says changing majors within the same credential, such as undeclared to declared or BS to BA, is not a change of program of study.
Moving to another school, or moving up a credential level such as bachelor’s to master’s, does start a new program. Rules and FAQs are still being updated, so ask your financial aid office to confirm your case in writing.
What it does and does not protect
- It keeps the old borrowing limits. Parent PLUS can again run up to cost of attendance minus other aid.
- It does not keep the old repayment options. A new Parent PLUS loan made after July 1, 2026 still follows the new repayment rules (see the next section).
- A legacy student cannot opt out of the old limits, but can always borrow less.
- An older sibling’s status does not carry over. A student starting in 2027 begins under NEW CAPS APPLY.
The Parent PLUS Repayment Trap
A single new Parent PLUS loan made on or after July 1, 2026 can move every Parent PLUS loan you hold, including older and consolidated ones, onto the new Tiered Standard plan, which has no income-driven option and no Public Service Loan Forgiveness credit.
What the rule says
Parent PLUS loans made on or after July 1, 2026 can only be repaid under the Tiered Standard plan. NASFAA’s guidance for aid offices adds that the law requires all of one parent’s Parent PLUS loans to be repaid under the same plan.
That is how one new loan reaches back to older ones. It is also why a consolidation that includes Parent PLUS loans on or after July 1, 2026 gets Tiered Standard only.
What the Tiered Standard plan looks like
It is a fixed monthly payment. The length depends on the balance when repayment starts:
- Under $25,000: 10 years
- $25,000 to $49,999: 15 years
- $50,000 to $99,999: 20 years
- $100,000 or more: 25 years
Parent PLUS loans are not eligible for the Repayment Assistance Plan. See RAP Plan for Student Loans for how that plan works for other borrowers.
Who was protected, and who was not
- Consolidated before July 1, 2026: these parents can use Income-Contingent Repayment, with enrollment required before July 1, 2028 per NASFAA. They lose that access if they borrow a new Parent PLUS loan.
- Did not consolidate by June 30, 2026: the window has closed. Consolidating now gives Tiered Standard only.
- Parents of legacy students: legacy status raises the borrowing limit. It does not exempt the new loan from the new repayment rules.
Forgiveness paths are narrow for Parent PLUS. For the programs that still exist, see Student Loan Forgiveness Programs. If a balance is ever forgiven, Is Student Loan Forgiveness Taxable? covers the tax side.
A simple decision rule
- No older Parent PLUS loans, and no plan to use income-driven repayment: the question is mostly cost and caps. Borrow only what the gap requires.
- Older Parent PLUS loans and you are counting on income-driven repayment or PSLF: treat a new Parent PLUS loan as the last option, not the first.
- Not sure which describes you: ask your loan servicer before you accept a new loan, and check your loan types at studentaid.gov.
Before a parent takes a new Parent PLUS loan
Copy this checklist and answer it before you sign.
- Do I already have Parent PLUS loans?
- Am I counting on income-driven repayment for them?
- Would a new loan change that? Check with the servicer and studentaid.gov.
- Is the student eligible for the legacy rules?
- Have we exhausted grants, appeals, and payment plans?
- Could this payment, on top of my other debts, delay my retirement? See How Much Money Do You Need to Retire?
Graduate and Professional Students: Life After Grad PLUS
Without Grad PLUS, new graduate students can borrow $20,500 a year (up to $100,000) and professional students $50,000 a year (up to $200,000) in federal loans, and nothing else federal fills the rest.
Existing Grad PLUS loans are unchanged, and they count toward the $257,500 lifetime cap. Students who qualify for the legacy provision may keep borrowing Grad PLUS for a limited time.
Which degrees count as professional
This is the least settled piece of the law. ED’s May 1, 2026 final rule named 11 fields: pharmacy, dentistry, veterinary medicine, chiropractic, law, medicine, optometry, osteopathic medicine, podiatry, theology and clinical psychology. Education and social work were not on that list.
On June 24, 2026, a federal court in Washington, D.C. temporarily stayed part of that definition. ED responded on June 29 (Electronic Announcement GENERAL-26-42, updated July 10) with an interim list of 29 programs treated as professional while the case continues. It adds programs such as post-baccalaureate nursing degrees, physician assistant programs and audiology, and drops others.
ED says the interim designations may change as the litigation proceeds, and a July 2026 legal summary reported that court briefing would run through early December. Read the current ED list and ask your program which limit it uses. Business programs, including the MBA, were not on the lists we reviewed.
Worked example: a first-year MBA
Cost of attendance $85,000. A $10,000 scholarship. No family contribution. Assumptions are ours, for illustration only.
- NEW CAPS APPLY: $85,000 − $10,000 = $75,000 needed. Federal Direct Unsubsidized: $20,500. GAP TO FILL: $54,500 for the year.
- Same numbers in a professional program that qualifies for the higher limit: federal $50,000. GAP TO FILL: $25,000.
- OLD RULES APPLY (a legacy student): Grad PLUS could fill the whole $75,000 under the old rules, so the gap is $0, for the legacy period only.
For a two-year MBA, the gap repeats: about $109,000 over two years under these assumptions. Use the calculator with your own numbers.
Where the money comes from instead
Schools may set lower program-level limits, so check what your program allows. After that, see closing the gap in order. Private loans come last, and the risks are real.
How to Calculate Your Family’s Gap
Your gap is the cost of attendance, minus grants, minus what your family can pay, minus the federal loan money available under the rules that cover you.
- Start with the school’s annual cost of attendance from the aid offer. Tuition, housing, books and fees are included.
- Subtract grants and scholarships. These do not need to be repaid.
- Subtract what your family can pay from savings and income.
- Subtract the federal loans available under OLD RULES APPLY or NEW CAPS APPLY.
- What remains is your GAP TO FILL. If it is below zero, the gap is zero.
Worked example: a dependent undergraduate
Cost of attendance $62,000. Grants $18,000. No family contribution assumed. A first-year student starting in fall 2026 does not qualify for the legacy provision. The old-rules column shows what a legacy family would see, using the same $5,500 student loan for a clean comparison.
- NEW CAPS APPLY: $62,000 − $18,000 = $44,000. Student Direct Loan $5,500, Parent PLUS $20,000. GAP TO FILL: $18,500.
- OLD RULES APPLY: Parent PLUS can go up to $62,000 − $18,000 − $5,500 = $38,500. GAP TO FILL: $0, with parents carrying far more debt.
Now look at all four years with flat costs and the student’s loans at $5,500, $6,500, $7,500 and $7,500. The gaps run $18,500, $17,500, $16,500 and then $31,500, because the $65,000 Parent PLUS total runs out after $20,000, $20,000, $20,000 and $5,000. That is about $84,000 over the degree.
Some aid offices suggest spreading the total evenly: $65,000 over four years is $16,250 a year. That keeps access open for later years but widens the gap in the early ones.
Run the gap for every remaining year, not just next year. The calculator does this for you, with a simple estimate that uses the same costs each year.
Closing the Gap, in the Right Order
Work from the cheapest source to the costliest: appeal first, then free money, then payment plans and savings, then borrowing, with private loans last.
| Option | Cost | Risk | Best when |
|---|---|---|---|
| 1. Aid appeal (professional judgment) | Free | No guarantee; the school decides | Income dropped, or costs rose, since the FAFSA data was filed |
| 2. New grants and scholarships | Free; takes time | Competitive; some do not renew | You can apply before deadlines |
| 3. School payment plan | Often a small enrollment fee | Monthly cash flow; late fees | The problem is timing, not size |
| 4. 529 savings | Your own money, no new debt | Must match qualified costs to avoid tax | An account already exists |
| 5. Student work | Hours of time | Too many hours can hurt grades | Part-time work fits the schedule |
| 6. Cheaper path (community college start, in-state) | Lowest total cost | Credits may not all transfer | Cost of attendance is the real problem |
| 7. Parent PLUS, within the caps | Interest plus an origination fee | Parent is liable; repayment trap; total caps | Steps 1 to 6 are used and the trap does not hurt you |
| 8. Private loan | Credit-based interest and fees | Cosigner is fully liable; fewer protections | Everything above is used up |
Start with an appeal
Financial aid administrators can use professional judgment to adjust a family’s data or the cost of attendance when circumstances change. Ask in writing, with documents.
Copy this checklist for the request.
- The change in circumstances (job loss, medical costs, divorce, a sibling in college), with dates
- Documents: pay stubs, termination letter, medical bills
- The specific request: a review under professional judgment, a revised cost of attendance, or more institutional aid
- Competing offers from other schools, if any
- A polite follow-up date
Payment plans, savings and cheaper paths
A payment plan spreads the bill over months without new federal debt. Ask your bursar for the fee and the schedule.
A 529 is the cleanest source. See 529 Plans, and if there is money left after graduation, 529 to Roth IRA Rollover. Parents of younger children can look at UTMA/UGMA accounts and Trump Accounts.
Starting at a community college or choosing an in-state school lowers the cost of attendance itself, which shrinks every year’s gap. Federal loans within the limits are already counted in the calculator above.
Parent PLUS vs. Private Student Loans
Parent PLUS is a federal loan with set rules, while a private loan is a contract with a lender; the new Parent PLUS rules have narrowed the gap between them, but the cosigner risk on a private loan stays large.
| Feature | Parent PLUS | Private loan |
|---|---|---|
| Who is liable | The parent who borrows. The student is not on the loan. | The borrower and any cosigner, each for the whole balance. |
| Credit check | Yes, for adverse credit history, not a minimum score. | Yes. Approval and price depend on credit. |
| Rate type | Fixed, set each year under a federal formula. Check studentaid.gov for the current rate. | Fixed or variable, depending on the product. Compare in writing. |
| Repayment plans | New loans: Tiered Standard only. Older loans keep existing options if you do not borrow again. | Set by the lender. Hardship options vary. |
| Forgiveness eligibility | None for loans made on or after July 1, 2026. | None through federal programs. |
| Death and disability discharge | Federal discharge rules exist. Check studentaid.gov for current terms. | Varies by lender. Ask before you sign. |
| Cosigner needed | No. An endorser can help if a parent is denied for adverse credit. | Often, and the cosigner is fully liable. |
If the borrower stops paying, the lender can come to the cosigner for the full amount. Missed payments can hurt both credit histories. See Student Loan Wage Garnishment for what default can lead to.
Private loans do not have federal protections such as federal repayment plans. Ask each lender about fees, cosigner release, deferment and what happens on death or disability. We do not recommend lenders or compare rates here.
Don’t Pay for College With Your Retirement
Draining retirement accounts for tuition is usually the costliest way to cover a gap, because there are loans for college but no loans for retirement.
Early withdrawals are generally taxed and can carry a penalty. Some exceptions exist, but they often still leave you with the income tax. The money also stops growing, and taxable distributions can raise the income you report on later aid applications.
If you are weighing a 401(k) loan or a hardship withdrawal, read 401(k) Loan vs. Hardship Withdrawal first. To see what a smaller nest egg would mean, see How Much Money Do You Need to Retire?
Use the order in the table above. Retirement withdrawals are not on it.
Frequently Asked Questions
What are the new Parent PLUS loan limits?
For new borrowers, $20,000 a year and $65,000 total per dependent student. The total does not reset as you repay.
Is the Parent PLUS cap per parent or per student?
Per dependent student, with all parents combined. School aid offices applying ED’s guidance say two parents borrowing for one student share one $20,000 and one $65,000 limit. Confirm with your school.
Was Grad PLUS eliminated?
Yes, for new borrowers from July 1, 2026. Existing Grad PLUS loans are unchanged, and legacy students can keep borrowing for a limited time.
What replaced Grad PLUS loans?
Nothing federal. Graduate students rely on the capped Direct Unsubsidized loan, plus school aid, savings, work and, last, private loans.
What’s the new graduate student loan limit?
$20,500 a year and $100,000 total for non-professional graduate students. Undergraduate loans are not part of that $100,000.
What counts as a professional degree for the higher limit?
ED’s final rule names 11 fields, including law, medicine, dentistry and pharmacy. A court stay led ED to publish a longer interim list. See the graduate section for the status.
What is the $257,500 lifetime limit?
The most a student can borrow in federal loans in their own name. Parent PLUS loans for a dependent student are not counted.
Do undergraduate loans count toward the lifetime limit?
Yes. They do not count toward the graduate or professional totals.
Who qualifies for the legacy provision?
Students enrolled in a program on June 30, 2026 with a Direct Loan for that program disbursed before July 1, 2026, who stay in it. A Parent PLUS loan can serve for the parent’s side.
How long does the legacy provision last?
The shorter of three academic years or the time left in the program, and no later than the end of the 2028–29 year.
Does changing programs or majors end the legacy provision?
Changing programs does. ED’s May 20, 2026 FAQ says changing majors within the same credential does not. Ask your aid office to confirm before you switch.
Does part-time enrollment lower my limits?
Annual Direct Loan limits are reduced in proportion to enrollment intensity from 2026–27. Ask your aid office how it applies to a PLUS loan.
Can a new Parent PLUS loan affect my old ones?
Yes. All of a parent’s Parent PLUS loans must be repaid under the same plan, so a new one can end income-driven repayment access for older loans. See the trap.
Can Parent PLUS loans use RAP?
No. New Parent PLUS loans use the Tiered Standard plan. Read about RAP for other borrowers.
Can I appeal my financial aid offer?
Yes. Ask for a professional judgment review in writing. The checklist is in the section on closing the gap.
Is a private loan better than Parent PLUS?
It depends on terms and risk. Compare them in Table 3, and remember the cosigner is fully liable.
Should I use my 401(k) to pay for college?
It is rarely a good idea. See the retirement section.
When does the 2027–28 FAFSA open?
It already did. Federal Student Aid launched it on September 24, 2026, the earliest launch on record per NASFAA. Federal, state and school deadlines differ, so check each.
Sources
- studentaid.gov — loan limits, PLUS loans, repayment plans, FAFSA
- RISE final rule, Federal Register, May 1, 2026 and the ED fact sheet
- Loan limits FAQ, May 20, 2026 version (copy hosted by Washington State University)
- ED Electronic Announcement GENERAL-26-42, June 29, 2026, updated July 10
- NASFAA, Parent PLUS changes for new parent borrowers (copy hosted by Rider University)
- NASFAA on program-level loan limits (ED Dear Colleague letter, June 26, 2026)
- NASFAA on the 2027–28 FAFSA launch, September 24, 2026
- Federal Student Aid Handbook, Volume 8, Chapter 4 (2025–26 edition)
Last updated: . Re-verified when ED issues new guidance.
This article is general information, not financial or legal advice. Limits reflect the One Big Beautiful Bill Act and Dept. of Education guidance as of October 31, 2026. Your school determines your actual eligibility, and rules and guidance may change. Confirm your limits with the school’s financial aid office.
Daniel Hayes is the founder and sole researcher at AdvoraHQ. He covers U.S. personal finance, insurance, and consumer law — working directly from IRS publications, federal and state statutes, court opinions, and SEC filings rather than secondary summaries. His focus is the gap between what readers think they know and what the source documents actually say. Daniel is not a licensed attorney, CPA, or financial advisor; his articles are educational and not personalized advice. Reach him at Daniel.Hayes@advorahq.com.
