Public Law 119-21, Title VIII, Section 81001 amends Section 455(a) of the Higher Education Act of 1965. The key provisions:
Annual Borrowing Caps (Effective July 1, 2026)
| Student Type | Annual Cap | Definition |
|---|---|---|
| Professional student | $50,000 | Enrolled in a program awarding a degree listed in 34 CFR § 668.2 |
| Graduate student | $20,500 | All other graduate programs not on the professional list as defined above |
| Parent PLUS (for undergrads) | $20,000 | Per dependent student, across all parents |
Aggregate Borrowing Limits
| Student Type | Aggregate Limit | Notes |
|---|---|---|
| Graduate only (never professional) | $100,000 | Above undergraduate borrowing |
| Professional only (never graduate) | $200,000 | Above undergraduate borrowing |
| Mixed graduate + professional | $200,000 combined | Professional amount reduces graduate headroom |
| Lifetime maximum (all students) | $257,500 | Across all federal borrowing except Parent PLUS |
| Parent PLUS aggregate | $65,000 | Per dependent student |
Author's note: All caps and aggregate limits are fixed nominal dollar amounts. The statute contains no inflation adjustment or periodic review mechanism. The aggregate limits introduce a dimension our annual gap calculations do not fully capture. For many long-duration programs, the aggregate ceiling — not the annual cap — becomes the binding constraint. See "The Four-Year Wall" in Finding 7 for the full analysis.
Critical Timeline
| Date | What Happens |
|---|---|
| June 30, 2026 | "Grandfathering" snapshot: students enrolled and already borrowing retain prior rules |
| July 1, 2026 | Grad PLUS terminated. New annual and aggregate caps take effect. Institutional authority to limit borrowing begins |
The Interim Exception
Students enrolled in a program as of June 30, 2026 who have already received a federal loan for that program may continue borrowing under prior rules for the lesser of three academic years or their remaining time to credential. This creates a tapering window: a first-year medical student enrolled before the cutoff retains access to Grad PLUS for up to three more years. A student who enrolls in fall 2026 does not. Critically, the grandfathering is tied to "such program of study": a student who transfers to a different program loses eligibility and falls under the new caps immediately.
Institutional Authority
Beginning July 1, 2026, institutions gain explicit statutory authority to limit total loan amounts for specific programs, provided limits are applied uniformly to all students in that program. This allows schools to cap borrowing below the federal limit: for example, to prevent over-borrowing in lower-cost programs where the federal cap exceeds the actual cost of attendance, or to manage institutional exposure to student loan default metrics.