Federal Student Loan System Undergoes Major Restructuring with New Borrowing Limits and Program Changes

The federal student loan system is undergoing significant changes, including new limits on borrowing for graduate and professional programs, and the discontinuation of the Grad PLUS loan program for new borrowers starting July 1, 2026. While a federal court temporarily blocked some new loan limits, the Department of Education has issued an updated list classifying additional graduate programs as 'professional degrees' for the duration of court proceedings. These changes are impacting current and future students, with professional degree borrowers capped at $50,000 annually ($200,000 lifetime) and nonprofessional borrowers at $20,500 annually ($100,000 lifetime). Parent PLUS loans are also now limited to $20,000 annually per student ($65,000 lifetime maximum).