What changed in 2026
A 2025 federal law (the One Big Beautiful Bill Act) changed student loans. Most changes started on July 1, 2026.
- Grad PLUS loans ended for new graduate borrowers.
- Graduate students can borrow up to $20,500 a year in federal loans, and $100,000 in total.
- Professional students can borrow up to $50,000 a year, and $200,000 in total. “Professional” is being decided in court. After a June 2026 court order, the Department of Education’s interim list has 29 program types. It includes medicine, law, dentistry and pharmacy, and for now also physician assistant, physical therapy, occupational therapy and many nursing programs (such as MSN and DNP). MBA programs are not on the list. The list may change. Ask your school how your program is classified.
- Parent PLUS loans are capped at $20,000 a year and $65,000 in total, per student.
- A lifetime cap of $257,500 applies to all federal student loans, not counting Parent PLUS.
- New repayment plans: new loans can use only the standard plan or the new Repayment Assistance Plan (RAP). New Parent PLUS loans can use only the standard plan.
The dollar limits for undergraduates did not change. But if you study less than full-time, your yearly limit is lower. Your school can also set lower limits. Read the details in Student Loans: What You Need to Know About the 2026 Limits.
Federal loan rates for 2026–27
These rates are fixed for the life of the loan. They apply to loans first paid out from July 1, 2026 to June 30, 2027.
| Loan type | Interest rate |
|---|---|
| Undergraduate (subsidized and unsubsidized) | 6.52% |
| Graduate and professional (unsubsidized) | 8.07% |
| PLUS loans (parents) | 9.07% |
Federal loans also have a fee. It is taken out of the money before you get it. The fee is 1.057% for Direct Subsidized and Unsubsidized Loans and 4.228% for PLUS loans.
The right order to pay for college
- Fill out the FAFSA. It is free and opens the door to grants, work-study and federal loans.
- Use free money first: grants and scholarships. You never pay these back.
- Use federal student loans next. They have fixed rates and more ways to lower payments.
- Use private loans last, only for the gap that is left.
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Federal vs private student loans
| Federal loans | Private loans | |
|---|---|---|
| Who lends | U.S. Department of Education | Banks, credit unions, online lenders |
| Credit check | No (except PLUS loans) | Yes; many students need a cosigner |
| Interest rate | Fixed, same for everyone | Fixed or variable, based on credit |
| Income-based payments (RAP) | Yes (not Parent PLUS) | No |
| Public Service Loan Forgiveness | Yes (through RAP; not new Parent PLUS loans) | No |
Still short? Find your funding gap
Many families and grad students now have a gap that federal loans no longer cover. Work out the gap first. Then compare private loan offers from several lenders. Checking rates with a soft credit check does not hurt your credit score.
More student loan guides
- What You Need to Know About the 2026 Limits
- How to Get a Student Loan: Step by Step
- Are Student Loans Worth It in 2026?
- Student Loan Do’s and Don’ts
Sources
- Federal Student Aid: One Big Beautiful Bill Act updates
- Federal Student Aid: Interest rates for loans first disbursed July 1, 2026 – June 30, 2027
- Federal Student Aid: Loan fees for loans first disbursed Oct 1, 2026 – Sept 30, 2027
- States Newsroom: What’s a professional graduate degree? (court order and interim list, July 2026)
- Congressional Research Service: Direct Loan Program Student Loans: Terms and Conditions
Last checked: November 6, 2026. Rules and rates change. Always confirm with studentaid.gov or your school’s financial aid office.