Federal student lending is being rewritten. Grad PLUS loans are no longer available for new borrowing, graduate and parent loans now carry fixed dollar limits, and new loans are steered into two repayment options: a new standard plan and the Repayment Assistance Plan, known as RAP. This explainer walks through what changed, who is affected and what the numbers look like in practice.
The changes stem from the One Big Beautiful Bill Act, passed by Congress in 2025. According to PBS NewsHour reporting published Feb. 4, 2026, most of the changes were scheduled to take effect July 1, 2026, with a few more arriving on July 1, 2027. Figures below are as of that reporting; borrowers should confirm current details with Federal Student Aid before making decisions.
What changed for graduate and parent borrowers?
The biggest shift is at the top of the borrowing ladder. According to PBS NewsHour, Graduate PLUS loans are no longer available, and the new rules instead set explicit limits on how much students and parents can borrow.
Federal undergraduate loans taken out in students’ own names are not affected by the new caps, PBS reported. The limits apply to graduate and professional students and to parents who borrow on behalf of a child.
| Borrower type | Annual limit | Total limit |
|---|---|---|
| Graduate student | $20,500 | $100,000 |
| Professional student (for example, medicine, law, veterinary, dentistry) | $50,000 | $200,000 |
| Parent PLUS (per student) | $20,000 | $65,000 per student |
Source: PBS NewsHour, Feb. 4, 2026.
For context, the same reporting noted that about 3.6 million people held Parent PLUS loans last year, totaling about $116 billion. That scale helps explain why the new limits are drawing attention from families as well as graduate programs.
Who counts as a “professional” student?
The label matters because it decides which cap applies. PBS listed medicine, law, veterinary and dentistry as examples of professional programs, which receive the higher $50,000 annual and $200,000 total limits.
The reporting also noted that nursing and public health programs are now classified as not professional. Students in those fields therefore fall under the lower graduate limits of $20,500 a year and $100,000 in total. Anyone enrolled in a health-related graduate program should ask the school’s financial aid office which category their program falls into before assuming a limit.
How does the new standard repayment plan work?
For loans taken out after July 1, 2026, borrowers get two choices rather than the half dozen plans that exist today, according to PBS. One is a new standard plan with a fixed monthly payment. The other is a single income-driven plan, RAP.
Under the new standard plan, the length of the repayment term depends on how much a borrower owes:
| Loan balance | Repayment term |
|---|---|
| Less than $25,000 | 10 years |
| $25,000 to less than $50,000 | 15 years |
| $50,000 to less than $100,000 | 20 years |
| $100,000 or more | 25 years |
Source: PBS NewsHour, Feb. 4, 2026.
A worked example shows how the tiers translate into time. A borrower with a $30,000 balance falls in the 15-year tier, which means 15 × 12 = 180 monthly payments. A borrower with a $60,000 balance falls in the 20-year tier, or 20 × 12 = 240 monthly payments. A balance of exactly $100,000 lands in the 25-year tier, or 300 payments. The reporting did not give monthly payment amounts, which would also depend on interest rates.
How is the Repayment Assistance Plan calculated?
RAP ties the monthly bill to income. According to PBS, the structure works like this:
- Borrowers who earn less than $10,000 pay a minimum of $10 a month.
- Borrowers who earn between $10,000 and $20,000 pay 1% of their income.
- The rate rises by one percentage point for every additional $10,000 earned, reaching 10% for borrowers who make $100,000 or more.
- The monthly payment is lowered by $50 for each dependent claimed on the borrower’s tax return.
- The government covers unpaid interest and pays up to $50 of principal for each on-time payment.
- Borrowers must make qualifying payments for 30 years before any remaining balance is forgiven.
Illustrative arithmetic
PBS cited an analysis by the Institute for College Access and Success showing that a single borrower earning $57,000 would pay $238 a month on RAP. The structure above explains that figure: an income between $50,000 and $60,000 falls in the 5% band, so the annual payment is 5% of $57,000, or $2,850. Divided by 12, that is $237.50, which rounds to $238.
Now add dependents. Under the $50-per-dependent rule, a borrower with that same payment and one dependent would pay about $188 a month, and one with two dependents about $138. This is illustrative arithmetic based on the published formula, not a prediction for any individual borrower, since the actual calculation uses adjusted gross income and other details.
The same analysis compared RAP with the SAVE plan for a family of four at a median income of $81,000: $440 a month on RAP versus $36 on SAVE. For the single borrower at $57,000, SAVE would have meant $140 a month versus $238 on RAP.
Why is RAP forgiveness slower?
Forgiveness is where RAP differs sharply from older income-driven plans. PBS noted that RAP requires 30 years of qualifying payments, compared with 20 or 25 years on other income-driven plans. In exchange, the interest and principal features mean a borrower making on-time payments sees the balance shrink rather than balloon. A low payment no longer lets unpaid interest pile up, because the government covers it.
For borrowers who plan to work in public service, there is a separate wrinkle. PBS reported that Parent PLUS borrowers can use only the standard plan and are not eligible for Public Service Loan Forgiveness.
What happens to people who already have loans?
Existing borrowers are largely protected, provided they do not change their loans. According to PBS, borrowers who do not consolidate or borrow more are grandfathered into the legacy repayment plans. New loans, consolidations and additional borrowing under existing loans are subject to the new rules.
The SAVE plan is a separate case. PBS reported that SAVE is no longer available to borrowers because its future is being litigated. Anyone still waiting on the plan’s status should check with their loan servicer and with Federal Student Aid for the latest guidance.
What changes arrive in 2027?
A second set of changes begins July 1, 2027, and applies to loans taken out after that date. According to PBS:
- Economic hardship and unemployment deferment are no longer available.
- Forbearance is limited to nine months within any two-year period.
Under current rules, forbearance can last up to one year at a time and three years in total. For new borrowers, the practical message is that pausing payments will be harder, so a plan for handling a rough patch, such as moving to a lower income-based payment, matters more.
Does Maryland feel this?
The changes are national, but the effects reach Maryland campuses. The state has a large public university network, explained in the guide to the University System of Maryland and its 12 institutions, and graduate and professional programs there draw students who rely on federal loans. Programs whose students typically borrow heavily, including health professions, are where the new caps and classifications are most likely to come up in financial aid conversations.
Maryland’s public schools are a separate world from federal student lending, and K-12 families will not see these limits directly. Readers curious about how education is governed in the state can start with the explainer on how Maryland’s public schools are organized into 24 school systems. Parents of future college students, however, may find the Parent PLUS caps relevant when planning how to pay for an undergraduate degree.
What should students and families check next?
Several practical questions come out of the new framework, none of which require financial advice to ask:
- Does the program count as graduate or professional under the new definitions?
- What is the total cost of the program compared with the annual and total caps?
- Will the borrowing happen after July 1, 2026, which would place new loans under the new repayment options?
- For existing loans, would consolidating or borrowing more move the borrower out of the legacy plans?
- For a Parent PLUS loan, which repayment plan is open?
Schools’ financial aid offices and Federal Student Aid are the places to confirm how these rules apply to a specific loan.
The bottom line on the new loan landscape
The new rules replace open-ended graduate and parent borrowing with firm ceilings and reduce the menu of repayment plans for new loans to two. The trade-offs are real: payments under RAP can be higher than under SAVE for some households, forgiveness takes longer, and nursing and public health students face lower limits than law or medical students. Existing borrowers who stay put keep their current plans, while anyone taking on new debt should understand the caps, the repayment terms and the 2027 changes before signing.
This article is general information about federal policy, not financial or legal advice. Rules and figures may change, so check with Federal Student Aid and your school.
Sources: PBS NewsHour
