What the end of the Grad PLUS loan program means for grad students

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Quick Summary

• As of July 1, 2026, federal Grad PLUS loans are no longer available for new borrowers.

• If you already have a Grad PLUS loan before then, you may be grandfathered in, allowing you to keep borrowing through your current program.

• Graduate students face lower federal borrowing limits and may need to explore other options to help cover remaining education costs.

One Big Beautiful Bill (OBBB), which took effect on July 1, 2026, made several big changes to federal student loans—including ending the federal Grad PLUS loan program for new borrowers.

If you're currently in grad school or thinking about enrolling, these changes could impact how much federal funding is available and whether you'll need additional financing to cover costs. Here’s what you need to know about what’s changing, who may be grandfathered in, and what options grad students have going forward.

What’s changed with federal Grad PLUS loans? 

Before the OBBB, graduate and professional students had annual and lifetime limits on Direct Unsubsidized Loans, but they could borrow above those limits with federal Grad PLUS loans. So in practice, students would max out unsubsidized loans, then use Grad PLUS to fill any remaining gap.

Now that the changes are in effect, federal borrowing caps are lower, and Grad PLUS loans are gone for new borrowers. That means if you’re like the 1 in 5 grad students who already borrow more than the new caps allow, you’ll need to find private funding sources to close the gap.

Federal Student Borrowing: Before vs. After July 1, 2026

What if I already have federal Grad PLUS loans?

Students who already have federal Grad PLUS loans will be grandfathered in. As long as you’ve taken out a Grad PLUS loan before July 1, 2026, you can keep borrowing through the program for three more years, or until your program ends—whichever comes first. 

For everyone else, covering the cost of grad school may mean looking beyond federal loans. Here’s the good news: Earnest Private Student Loans have long been a smart alternative to federal Grad PLUS. With competitive rates, no fees¹, and flexible repayment options², Earnest can help you responsibly fill the funding gap—and potentially help you save.

What can I do now that Grad PLUS loans are gone for new borrowers?

Whether you're already enrolled or still weighing your options, it's a good idea to avoid funding surprises down the road. Federal Grad PLUS loans may not be available for you, but the federal graduate student loan program has not been eliminated. Federal loan options are still available, and there are other ways to help pay for graduate school. Here's what to do next:

1. Complete a FAFSA. Find out if you’re eligible for federal graduate student loans by filling out a Free Application for Federal Student Aid (FAFSA).

2. Look for scholarships, grants, and assistantships. These can all help you close funding gaps—without costing you any interest. Now is a good time to build up a list and start applying.

3. Consider private lenders to help fill any gaps. With so much changing, Earnest is here to make things simple—so you can focus on earning your degree. But don’t just take our word for it. Read what real Earnest customers have to say. Then check your eligibility for a student loan today to see how much you could save. to see how much you could save.

If you're still deciding which graduate or professional program is right for you, be sure to factor in the total cost. Use our calculator to estimate the ROI of grad school and determine whether it fits your long-term goals and budget.

Private grad student loans vs. Grad PLUS Loans

If you’ve already maxed out your federal student loan borrowing and scholarship options, it may be time to consider a private lender. Some institutions—like Earnest—provide fee-free loans¹ to cover up to your full cost of attendance.

Disclaimer: Rates provided in the above table may not be representative of rates offered by Earnest. These are example rates for comparison purposes only. View current rates.

How Earnest can help

While federal student loans come with generous borrower protections, private student loans can provide more stability in a rapidly changing federal borrowing environment. At Earnest, we offer grad students:

• Flexible loans with low rates—so they have a fallback plan if they need it.

• No origination fees, late fees, or prepayment penalties¹.

• Payment relief options in case you lose your job or go back to school.

• The option to skip a payment once per year without penalty⁸.

• Much lower rates than Grad PLUS loans—with a choice between fixed and variable rates.

This post provides personal finance educational information, and it is not intended to provide legal, financial, or tax advice. It is accurate as of its publishing date.

Earnest Private Student Loans are subject to credit approval.

Before applying for private student loans, it’s best to maximize your other sources of financial aid first. It’s recommended to use a 3-step approach to assembling the funds you need: 1) Look for funds you don’t have to pay back, like scholarships, grants, and work-study opportunities. 2) Next, fill out a FAFSA_® form to apply for federal student loans options. Finally, consider a private student loan to cover any difference between your total cost of attendance and the amount not covered in steps 1 and 2. For more information, visit the Department of Education website at studentaid.gov.

¹ Earnest does not charge fees for origination, late payments, returned check, or prepayments. Florida Stamp Tax: For Florida residents, Florida documentary stamp tax is required by law, calculated as $0.35 for each $100 (or portion thereof) of the principal loan amount, the amount of which is provided in the Final Disclosure. Lender will add the stamp tax to the principal loan amount. The full amount will be paid directly to the Florida Department of Revenue. Certificate of Registration No. 78-8016373916-1.

² Repayment terms and repayment options available vary based on loan type.

³ Actual rate and available repayment terms will vary based on your financial profile. Our lowest rates are only available for the most credit qualified existing cosigned loan borrowers who receive the 0.25% Loyalty discount and requires selection of our shortest term offered, full principal and interest payment while in school, and enrollment in our 0.25% Auto Pay discount. Enrolling in Auto Pay is not required as a condition for approval. Interest rates are subject to change.

⁴ You can take advantage of the Auto Pay interest rate reduction by setting up and maintaining active and automatic ACH withdrawal of your loan payment from a checking or savings account. The interest rate reduction for Auto Pay will be available only while your loan is enrolled in Auto Pay. Interest rate incentives for utilizing Auto Pay may not be combined with certain private student loan repayment programs that also offer an interest rate reduction. It is important to note that the 0.25% Auto Pay discount is not available when loan payments are deferred during the interim period as a result of selecting the deferred repayment option.

⁵ Only applicants who have previously obtained a disbursed Earnest Private Student Loan are eligible for the Loyalty Discount. To obtain the discount you must also apply using the same email address associated with that loan. Only one Loyalty Discount may be applied per eligible Earnest Private Student Loan, and applicants eligible for separate discounts or awards under other qualified programs may not qualify. This offer cannot be combined with Earnest’s Rate Match program. Earnest may modify or discontinue this offer at any time and without notice; however, once a Loyalty Discount is earned, it will not be taken away.

⁶ Nine-month grace period is not available for borrowers who choose our Principal and Interest Repayment plan while in school.

⁷ Deferment options are not available for borrowers who choose our Principal and Interest Repayment plan.

⁸ Earnest clients may skip a single payment during a 12 month period. Your first request to skip a pay can be made once you’ve made at least 6 months of consecutive on-time full principal and interest payments, and your loan is in good standing. The final payoff date on your loan will be extended by the length of the skipped payment periods. Please note that skipping a payment is not guaranteed and is at Earnest’s discretion. Your monthly payment and total loan cost may increase as a result of postponing your payment and extending your term.