finance
Department of Education Finalizes Borrowing Caps for Graduate and Professional Federal Student Loans
The U.S. Department of Education has finalized regulations introducing borrowing caps on federal student loans for graduate and professional degrees. The changes, part of President Trump's Working Families Tax Cuts Act, eliminate the graduate PLUS loan program and set new annual and lifetime limits starting July 1, 2026. Current students receive exemptions for up to three years.
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The Department of Education finalized a student loan overhaul on Thursday, introducing new borrowing limits on federal student loans for graduate and professional degrees beginning with loans taken out on July 1, 2026. Students can borrow up to $20,500 a year and up to $100,000 in total for graduate degree programs.
For professional programs such as medicine and law, students can borrow up to $50,000 a year and $200,000 over the course of their studies.
Previously, loans for graduate and professional programs had an annual limit of $20,500 and a lifetime limit of $138,500. The regulations eliminate the graduate PLUS loan program, which previously allowed students to borrow up to their entire cost of attendance regardless of degree program.
The changes stem from the Working Families Tax Cuts Act, enacted in July 2024, which directed the Department of Education to revise federal loan programs.
The final rule went through the negotiated rulemaking process since the legislation passed in July, including a public comment period. The administration kept the definition of professional degrees narrowed to 11 doctorate programs: Pharmacy (Pharm.
U.S. C. D. ). Clinical psychology was not included in the original rule proposal but was added during the negotiated rulemaking process. The new rule puts in place an aggregate lifetime loan limit of $257,500, which includes undergraduate loans and some grad PLUS loans.
