In a Reversal, ED Says Graduate PLUS Loans Will Count Toward New Lifetime Borrowing Limit
By Maria Carrasco, NASFAA Staff Reporter , Jill Desjean, Director of Policy Analysis
The Department of Education (ED) on Monday revised its previous guidance, now stating that Graduate PLUS loans will be included in the new $257,500 lifetime borrowing limit established through the One Big Beautiful Bill Act (OBBBA), NASFAA has learned. The new limit will apply as of July 1, 2026, to all borrowers except those who qualify for the limited exception to the new loan limits.
This revision in guidance is a follow-up from an April 17 webinar on legacy loan limits where ED provided conflicting answers to the question of whether Grad PLUS loans would not count in the lifetime borrowing limit.
While ED’s proposed Reimagining and Improving Student Education (RISE) regulations stated that Graduate PLUS loans would not be included in the lifetime limit, it has now revised its position to note that these loans will, in fact, be included in that limit. This is based on a new interpretation of the statute. Parent PLUS loans continue to be exempt from the lifetime limit.
NASFAA President and CEO Melanie Storey called on the department to immediately issue clear, formal guidance regarding this reversal and to prioritize timely, transparent communication moving forward.
"With many schools preparing to issue financial aid offers in the coming weeks — and some doing so this month — this approach is both irresponsible and unfair to students and financial aid professionals who are working in good faith to make informed decisions amid inconsistent and incomplete information," Storey said in a statement. "When significant policy changes are rolled out without clear, formal, and widely distributed guidance, there are severe consequences that directly affect students who need definitive answers now in order to make plans to pay for college."
Shortly after the Federal Student Aid Training Conference (FSATC) in March, ED also corrected its interpretation of whether loans borrowed before July 1, 2026, are subject to the new aggregate and lifetime loan limits in the OBBBA. ED had previously said that these older loans would not be subject to the new aggregate and lifetime limits, but has since corrected its position and stated that loans borrowed prior to July 1, 2026, are to be counted in the new aggregate and lifetime limits at whatever point a student becomes subject to those limits.
With Monday’s new information, this means Grad PLUS loans borrowed prior to July 1, 2026, will apply against students’ $257,500 lifetime borrowing eligibility at whatever point the new limits apply to them (when they no longer qualify for the current borrowing caps under the limited exception).
Many of NASFAA’s OBBBA resources over the past several months reflect ED’s original interpretation of the statute. NASFAA will be revising those resources as soon as possible and announcing those updates in Today’s News. ED’s plans for updating their materials are not known at this time, although presumably the change will be reflected in the final RISE regulations, which ED has previously indicated will be published around May 1, 2026.
Publication Date: 4/20/2026
Deepika V | 5/19/2026 1:9:02 PM
Are Grad plus loans that are repaid also calculated under Life time limit of $257,500 even if the student is in legacy provision?
Julia K | 4/29/2026 1:52:48 PM
will it be possible to have some kind of table/matrix that helps us understand the path to each legacy/non-legace, aggregate/liftime limits? please.
Michelle C | 4/21/2026 12:13:18 PM
I would also like clarification on those who are exempt. Are students who are already enrolled in graduate programs that might have already exceeded the aggregated limits still grandfathered in?
Chad B | 4/21/2026 11:25:19 AM
Just to clarify, Per the article, "Grad PLUS loans borrowed prior to July 1, 2026, will apply against students’ $257,500 lifetime borrowing eligibility at whatever point the new limits apply to them (when they no longer qualify for the current borrowing caps under the limited exception)." Does this mean if they have legacy then the limits do not count towards their lifetime limit?
Michelle C | 4/21/2026 10:44:43 AM
Ben - not students who took a scholar year or extended their program beyond the standard length. Those students may have a full year of tuition ahead of them and if they borrowed through both programs during the previous years, they may be out of luck. We are looking at this at my school for several people and it's heartbreaking to have to have the conversation at this stage of the game.
Ben R | 4/21/2026 10:38:59 AM
Michelle: Students who are close to completing a program will in most cases be grandfathered with no limit to the Plus loan as before (if they are currently enrolled and don't exceed the expected time to credential). The new lifetime limit does not apply to them.
Anthony S | 4/21/2026 10:36:46 AM
The U.S. uses a "high-tuition, high-aid" model where annual tuition typically ranges from $10,000 to over $40,000. In contrast, many European public universities charge little to nothing; for example, Germany charges only a small semester fee ($150–$300), and France's tuition is approximately $182 per year for residents.
Michelle C | 4/21/2026 10:17:48 AM
It seems that this will mean we have to look at the clearinghouse for all student who are extending programs, since aggregate limits typically have only applied to entitlement loans (sub and unsub) and are reported on the FAFSA. GPLUS loans are not reported there. I'm not sure why we would lump the two together - one has a credit component and one does not - it's an entitlement. Borrowers who are close to completing a program may well be pushed completely out of federal loans for the final year or two of their programs. I'm really hoping this is resolved in a way that is not punitive to the student.
Ben R | 4/21/2026 8:42:07 AM
When you think this through, it makes more sense. First, the new limits are meant to be absolute limits, not limits based on a loan type. Secondly, it only affects those who owe more than the new limits right now but are NOT grandfathered, i.e. not currently enrolled. Someone with more than $157,500 in debt, including grad Plus cannot borrow any more for a NEW graduate program, and someone with more than $257,500 can’t borrow more for a NEW professional program, which is the same for everyone else moving forward. It would have made no sense to exclude Graduate plus for those who are NOT grandfathered, because that would mean someone with far more than this level of debt could start another program at any point and borrow more Staffords for another degree, simply because of the type of loan they took out before.
Vanessa Ortiz V | 4/21/2026 12:39:00 AM
Students who qualify for the limited exception can continue borrowing, under the current loan limits, if they meet all the requirements to do so.
Vanessa Ortiz V | 4/21/2026 12:30:25 AM
... I wonder how they will treat unsubsidized graduate loans and Graduate PLUS loans that a student might consolidate before July 1, 2026, if they ultimately decide to exclude Graduate PLUS loans, or if they do in fact include them...
Vanessa Ortiz V | 4/21/2026 12:14:19 AM
https://www.congress.gov/bill/119th-congress/house-bill/1
Subtitle B--Loan Limits
This subtitle makes various changes to federal student loans.
The section also institutes new maximum aggregate limits for borrowers beginning on July 1, 2026. For example, the section sets an overall aggregate lifetime borrowing limit of $257,500 for any single borrower across federal loan types (except for Parent PLUS Loans).
Carmen Z | 4/20/2026 10:25:59 PM
Can NASFAA please define "except those who qualify for the limited exception to the new loan limits"? Does this include students who have already borrowed, whether they have already hit that limit or not?
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