For decades, graduate and professional students had a simple (if expensive) answer to the question of how to pay for school: Grad PLUS loans. Borrow up to the full cost of attendance. No cap. Just complete the FAFSA and accept the loan. Done.
That’s all changing. The One Big Beautiful Bill Act eliminated Grad PLUS loans for new borrowers starting with the 2026-27 academic year. If you are entering medical school, dental school, law school, or any other professional program this fall, you are in the first class that cannot access Grad PLUS (if you did not already have a Grad PLUS loan for your current program).
What Grad PLUS Covered and What You Lost
Grad PLUS was a blunt instrument, but it was reliable. Here is what it offered:
- Borrowing up to the full cost of attendance. No annual or aggregate limit beyond what your school certified as the cost of attendance. A medical student at a $90,000/year program could borrow $90,000.
- No credit score requirement (just no adverse credit history). Unlike private loans, Grad PLUS did not use your credit score to set a rate. Everyone got the same rate. The check was for adverse credit events (defaults, bankruptcies), not your score.
- Access to federal repayment plans and forgiveness. Grad PLUS loans qualified for income-driven repayment and PSLF. For borrowers planning careers at nonprofit hospitals, public defender offices, or government agencies, PSLF could forgive the entire balance after 10 years of qualifying payments.
The downside was cost. Grad PLUS rates were consistently the highest in the federal system (8.05%+ in recent years), and they carried a 4.228% origination fee. On a $70,000 Grad PLUS disbursement, the origination fee alone was nearly $3,000.
For a deeper look at how the OBBB changed the broader student loan landscape, the OBBB refinancing impact guide covers all five major changes affecting borrowers.
The New Federal Limits for Graduate Students
With Grad PLUS gone, here is what federal borrowing looks like for graduate and professional students in 2026-27:
| Program Type | Annual Federal Limit | Aggregate Federal Limit |
|---|---|---|
| Most Graduate Programs | $20,500 | $257,500 (including undergrad) |
| Health Professions (Medical, Dental, etc.) | $50,000 | $257,500 (including undergrad) |
| Law | $50,000 | $257,500 (including undergrad) |
| MBA and Other Professional Degrees | $20,500 | $257,500 (including undergrad) |
Learn more about specific degree limits in our guide to navigating new loan limits.
MBA students now face an even wider gap. At $20,500 per year in federal loans versus $60,000+ in costs, the annual gap is $40,000. Over two years of business school, that is $80,000 that needs to come from non-federal sources.
This is not a policy critique. It is a math problem that needs a solution, and the solution is a combination of private borrowing, scholarships, and strategic planning.
Private Student Loans: Now a Core Piece, Not a Backup Plan
For professional school students in the post-Grad-PLUS era, private student loans have moved from optional to essential. Here is how to approach them:
- Rate comparison. Private loan rates for graduate students with good credit (or a qualified cosigner) typically range from 4.25% to 7.25% for fixed-rate loans. That is often lower than the old Grad PLUS rate of 8.05%+, meaning many students are actually paying less in interest per dollar borrowed. The trade-off is the loss of federal protections, which we will address below.
- The cosigner advantage. Most first-year professional students do not have the income or credit history to qualify for the best private rates on their own. A parent or family member as a cosigner can reduce your rate by 1 to 3 percentage points. On a $45,000 annual loan, that rate difference saves $4,000 to $12,000 over the life of the loan.
- Multi-year borrowing strategy. You will be borrowing privately for 3-4 consecutive years. This means building a relationship with a lender matters. Some lenders offer loyalty benefits for repeat borrowers. Compare offers each year, but also consider the value of consistency with a lender who knows your history.
- In-school deferment. Most private student loan lenders offer in-school deferment for graduate students, meaning you do not make payments while enrolled. Interest typically accrues during this period (as it did with Grad PLUS), so the balance grows. Some lenders offer the option to make interest-only payments while in school to keep the balance from growing.
- Start with a rate check. Compare rates from multiple lenders with one soft credit pull. See what you may qualify for with and without a cosigner. That gives you the data to plan your full funding stack.
Scholarships, Grants, and Programs Most Professional Students Miss
Professional school students tend to assume that scholarships ended with undergrad. They did not. Here are funding sources worth pursuing:
- School-based scholarships and grants. Most medical, dental, and law schools award institutional scholarships. Some are merit-based, some need-based, and some are awarded after negotiation with the admissions or financial aid office. If you hold admission offers from multiple schools, use competing offers as leverage.
- National Health Service Corps (NHSC). For medical and dental students willing to practice in underserved areas, the NHSC Scholarship covers tuition, fees, and a monthly living stipend in exchange for a service commitment. This is one of the most generous funding programs in the country and is worth investigating early.
- Military medical programs. The Health Professions Scholarship Program (HPSP) through the Army, Navy, or Air Force covers full tuition, fees, and a monthly stipend for medical, dental, and some other health professions students. The commitment is a service obligation after residency. For students open to military service, this eliminates the funding problem entirely.
- Professional association awards. The AMA, ADA, ABA, and hundreds of specialty organizations offer scholarships ranging from $1,000 to $25,000+. The applications are often less competitive than undergrad scholarships because fewer people apply.
- Loan repayment assistance programs (LRAPs). Some law schools and hospitals offer LRAPs that repay a portion of your student loans after graduation if you work in qualifying fields (public interest law, primary care medicine). These are not upfront funding, but they change the total cost calculation significantly.
- Research assistantships and teaching positions. Medical and dental schools sometimes offer research positions that come with stipends or partial tuition remission. Law schools offer research assistant and teaching assistant positions. The amounts are modest, but every dollar that does not need to be borrowed saves you $1.50+ over the life of a 10-year loan.
Planning Across All Three or Four Years
The biggest mistake professional school students make is planning one year at a time. You are about to take on $150,000 to $350,000 in total debt. That requires a multi-year financial plan, not an annual scramble. Here is the framework:
Year 1: Maximize federal loans. Apply for private loans to fill the gap. Pursue every scholarship available. Lock in your private lender and establish the relationship.
Year 2: Compare private rates again (your credit may have improved). Reapply for scholarships. Start building relationships with faculty who might offer research positions with stipends.
Year 3 (and 4 for med/dental): By now you have a credit history from on-time payments on existing loans. Your private rate may improve. Continue pursuing institutional and external aid. Begin planning your post-graduation repayment strategy.
Total debt tracking: Maintain a running total of all your loans (federal and private), their rates, and their projected balances at graduation. This number should inform decisions about specialty choice, residency location, and whether to pursue PSLF or refinancing after graduation.
What Happens After Graduation: Repayment and Refinancing
The post-Grad-PLUS generation of professional school graduates will have a different loan portfolio than their predecessors. Instead of one large pile of federal loans, you will likely have a mix of federal Direct Unsubsidized loans and multiple private student loans.
This mix actually offers some advantages for repayment planning:
Federal loans: These still qualify for income-driven repayment and PSLF. If you are heading to a residency at a nonprofit hospital or a government/public interest job, keep these federal and make qualifying PSLF payments.
Private loans: Once you are earning an attending physician, associate attorney, or post-MBA salary, you can refinance these to an even lower rate. The physician refinancing guide covers the timing and strategy in detail, but the short version is: once your income is established and your credit score reflects years of on-time payments, you are in the strongest possible position to refinance.
The hybrid approach (keep federal for PSLF, refinance private for a lower rate) is likely to become the default strategy for professional school graduates. It captures the best of both worlds.
Grad PLUS was convenient. It was also the most expensive way to borrow for education that the federal government offered. Its elimination forces more planning and more comparison shopping, but the result for many students will be a lower total cost of borrowing. The key is starting that planning now, not in August.
See what private student loan rates you could qualify for with a soft credit pull across multiple credit union lenders. That one number is the foundation of your entire professional school funding plan.
