Big Changes Coming to Federal Student Loans in 2026

Starting July 1, 2026, the Department of Education will roll out one of the biggest student loan overhauls in decades.This isn’t just a few tweaks — it’s a total reset of how much you can borrow, what repayment plans are available, and which programs even exist.

If you’re a parent helping your child pay for college or a graduate student planning your next degree, these changes could have a major impact on your finances.

The Key Changes

• Parent PLUS Loans

  • New cap: $20,000 per year and $65,000 total per child.

  • The limit is per student and doesn’t reset if you repay or qualify for forgiveness.

  • Parents who borrowed before June 30, 2026, get a three-year grace period (through 2029) under old rules.

  • No more income-driven repayment options, which could make these loans harder to manage — and in some cases, less attractive than private loans.

    
    

• Graduate PLUS Loans

  • The program is being phased out entirely.

  • New limits:

    • Graduate students: $20,500 per year / $100,000 total

    • Professional students: $50,000 per year / $200,000 total

  • Borrowing beyond these caps won’t be possible.

    
    

• Repayment Plans

  • Going forward, new borrowers will have only two options:

    • The Standard Repayment Plan, or

    • The new Repayment Assistance Plan (RAP).

Why It Matters

The bottom line: expect more borrowing limits, fewer repayment options, and higher stakes for how you finance education.If you’re signing loan paperwork soon, you can’t assume the flexibility that existed in the past.

What to Do Now

• Plan ahead. Run our “Student Loan Debt/Salary Wizard” calculator to see what’s realistic for your situation.

• Parents: Reevaluate your PLUS loan strategy — private student loans may now be a better fit.

• Grad students: Understand your new borrowing limits and adjust your school financing plans accordingly.