Federal Loan Updates for 2026-2027

Beginning July 1, 2026, new federal legislation, (the One Big Beautiful Bill (OBBB) Act) will change how federal student loans work.  If you plan to borrow in 2026-2027 or later, these updates may affect your options.  Here's what you need to know.    

Graduate & Professional Students

The most significant changes concern the Federal Graduate PLUS Loan program and new lending limits for Federal Direct Unsubsidized Loans.

The Federal Graduate PLUS Loan will be eliminated for New Borrowers, unless you qualify for the Legacy Provision.

Effective July 1, 2026, the Federal Direct Graduate PLUS Loan program will be eliminated for new borrowers.  This means you will no longer be able to borrow up to the full Cost of Attendance (COA) minus other financial aid assistance using federal loans alone, unless you qualify for the Legacy Provision.

New Loan Limits for Graduate & Professional Students

The legislation establishes new annual and aggregate (lifetime) limits for Federal Direct Unsubsidized Loans, distinguishing between "Graduate" and "Professional" students.

Graduate Students (Master's, PhD):

  • Annual Limit: Remains at $20,500.
  • Aggregate Limit: Capped at $100,000 (does not include loans borrowed as an undergraduate).

Professional Students (Law):

  • Annual Limit: Increased to $50,000.
  • Aggregate Limit: Capped at $200,000 (does not include loans borrowed as an undergraduate).

Note: Currently Law is the only program that appears to qualify as professional at Gonzaga and while we fully expect the inclusion of Law Programs in the final list of "Professional" designations, the Department of Education is currently finalizing the specific list of programs that qualify as "Professional."

Legacy Provision: Federal Graduate PLUS Loan & New Loan Limits

Federal Graduate PLUS Loan

  • You may continue to borrow the Federal Graduate PLUS Loan up to the Cost of Attendance for up to 3 additional years, or until degree completion, whichever is shorter, if you meet BOTH of the following criteria:
  1. You are enrolled in the same credentialed program in 2026-27 that you were enrolled in prior to July 1, 2026.
  2. You borrowed a Federal Graduate PLUS Loan for that specific program before July 1, 2026.

New Loan Limits

  • Current Federal Loan borrowers (including Federal Graduate PLUS Loan and the Federal Unsubsidized Loan) will have no changes in annual or aggregate borrowing limits for Federal Unsubsidized Loans.
  1. Annual Limit: Remains at $20,500
  2. Aggregate Limit: Remains at $138,500 (does include Federal Direct Loans borrowed as an undergraduate and graduate student).

If you change programs or start a new degree after July 1, 2026, you will be subject to the new limits.

New Lifetime Federal Loan Cap

  • A new total lifetime limit of $257,500 will apply to all federal student loans combined.
  • Federal Parent PLUS loans are not included in this cap.

Parents of Undergraduate Students

New borrowers (after July 1, 2026):

  • Federal Parent PLUS loans remain available, but with limits:
    • Annual Limit: $20,000 per student, per year.
    • Aggregate Limit: Capped at $65,000 lifetime per student.

Current borrowers:

  • May continue borrowing up to the full cost of attendance for up to 3 years or through the student's current program, whichever is shorter.
  • Must be borrowing for the same student and program.

Other Important Updates

  • Federal loans will be prorated for part-time enrollment.
  • New borrowers will have two repayment options:
    • Standard Repayment
    • Repayment Assistance Plan (RAP)
  • Some existing repayment plans will phase out; borrowers on ICR, PAYE, or SAVE must switch plans by July 1, 2028, or they'll be moved to RAP.

How You Can Prepare

  • If needed, explore Private/Alternative loan options.
  • ELMSelect can help you: 
    • Compare lenders, rates, and repayment terms.
    • Review commonly used lenders (no school endorsement).
    • Make informed borrowing decisions.

We're Here to Help

For official updates, you are encouraged to visit the Federal webpage: One Big Beautiful Bill Act Updates.  We know these changes may feel overwhelming.  Student Financial Services is here to support you as you plan ahead and understand your options.  We'll continue to update this page as new guidance is released.  

Last Updated: February 3, 2026