The End of Grad PLUS Loans and How College Finances Change Moving Forward

Recently, over the last couple of months, a major news story has impacted families and college students in the United States. The way in which students and parents will be able to pay their student loans has changed. The current presidential administration made a change to a program called Grad PLUS, where students could borrow up to their cost of attendance, minus other financial aid they were receiving. This new change could really affect how people pay for loans moving forward, and we want to help you understand what to do.

In this blog, we will break down the change to Grad PLUS loans and how college financial aid as a whole will work moving forward because of it.

Everything You Need to Know About Grad PLUS

So let's start off by explaining and breaking down what Grad PLUS is. It’s a program that many people have probably not heard of, but have used regardless to help with their loan payments. 

It’s a program that allows you to pay for education expenses not covered by other financial aid. It’s a program that, based on the eligibility factors, can be super hassle-free. All you need is at least half of your time enrolled at your school, a completed free application for something like federal student aid (FAFSA) on file, and, finally, a satisfactory academic background.

We mentioned the cost of attendance, and after you fill out FAFSA, your school's financial aid office will determine what your cost of attendance is and offer you a financial aid package, and you can use that to help pay for the loans. You don’t have to start making payments until after a deferment period ends, which is just a regular temporary pause on the payments.

How are those funds delivered? Your college will take the time to apply a Grad PLUS loan fund to your school account, which would then help with paying for your tuition, room and board, and other school charges and fees accrued over 4 years (or 2 if you went for only half).

Essentially, Grad PLUS is a major help for you post graduation with making a start in your career life and working to help pay off those loans. Because Grad PLUS loans are a federal loan type, you can also be eligible for income-driven repayment plans like SAVE, forgiveness/discharge programs like Public Service Loan Forgiveness (PSLF), Total and Permanent Disability (TPD) Discharge, or even Borrower Defense to Repayment.

All of those different programs helped to make paying for the loans much easier, and if Grad PLUS works for them, it makes this process much easier for you and less of a stressful task to complete.

Why are Grad PLUS Loans Going Away?

So now that you have an idea of what Grad PLUS loans are and what they can do for you, lets talk about why the program, as of July 1st, 2026, will be eliminated for new loan borrowers. Because of the OBBB being passed under the current presidential administration (One Big Beautiful Bill), graduate students will have a stricter cap on any direct unsubsidized loans. Because of this, it could force students to rely more on private loans or other outside funding to pay it off.

Grad PLUS is not necessarily a program that is used by a majority of students; in fact, according to a 2024 report from the Georgetown University Center on Education and the Workforce, only 16% of graduate students are active with it. While that number might not be big, it does still affect thousands of students.

The worry for many people is now how they plan all of their financial aid in advance, even more than they did before, especially if they were considering graduate school as a possibility before they started their four years of undergraduate. 

Depending on who ends up paying for all the costs, student or parent, financial planning to ensure you can afford the costs is of the utmost importance now. Even with the new $92,000 federal loan limit that was also placed in the OBBB, the impact this has on college students moving forward will need to be taken more seriously.

How Our Team Guides You Through This

Our job at Send Your Kids to College is to provide all the help we can for those in school or ready to start it here in Buffalo and Western New York. Speaking about student loans and college financial aid is one of our top priorities. Because of our work with FAFSA, we have firsthand knowledge of the processes involved when a big change, such as Grad PLUS loans being removed, comes about. 

If you’re someone who’s looking to better understand how the student loan interest rates have increased in recent years, give our Student Loan Rate page a read. If you want to read more into how to avoid a Student Loan Crisis, give that page a read, and finally, with this news, we believe it’s time to have a much more general talk about college money. This will become more necessary to understand, and we will be there to support you. 

The best way to reach out to us is through our contact form and our FAFSA application page. We have helped so many students with that application form, and we hope that it helps you, too, with maneuvering around this change to college financial aid. 

Read more from these news articles on the story:

Understanding the OBBB Act: Major Changes Coming to College Funding and Student Loans

The New $92,000 Federal Loan Limit Impact on Building Your College List

Federal Student Loan Limits Are Changing and Here’s How OBBB Affects You