Vast changes to federal student loans take effect this week.

Students who take out their first federal loan on or after July 1 will face a $257,500 lifetime borrowing limit.1

Library of Congress. “H.R.1 – An act to provide for reconciliation pursuant to title II of H. Con. Res. 14.”

For the first time, a single cap covers everything a student borrows for their undergraduate, graduate, and professional studies. That excludes Parent PLUS loans, which parents take out separately.

The remaining changes will affect students differently, depending on their field of study and how far they are into their education.

Why This Matters

The new caps mean some families will hit a federal borrowing ceiling for the first time, and many may need private or personal loans to cover the gap.

What Undergraduate Students Need To Know

The only new limit specifically on undergraduate loans may come from colleges themselves. The 2025 One Big, Beautiful Bill Act broadens the colleges’ ability to cap the loans offered to students and families by major.

Colleges can be held responsible if too many of their graduates default on their federal student loans. That may push colleges to trim borrowing in programs whose graduates are likelier to default, typically fields that pay less but cost more to enter.

What Parents of Undergraduate Students Need To Know

Undergraduate borrowing limits will remain largely the same, but the amount parents can borrow will be sharply capped.

PLUS loans are typically taken out by an undergraduate student’s parents or grandparents to help the student pay for college. Previously, parents could borrow the full cost of attendance minus any grants or loans the student had received.

Starting this coming academic year, parents will have an annual limit of $20,000 and a total limit of $65,000 per child. The new cap applies only to parents who have not already taken out a Parent PLUS loan, so it will mainly affect parents of first-year students entering this fall.

Experts generally suggest that parents of college-bound students spread their PLUS borrowing across all four years. After three years of borrowing up to the annual limit, parents would only be able to borrow $5,000 for their child’s senior year.

What Graduate Students Need To Know

Graduate students will no longer have access to the Graduate PLUS loan, which they could previously use to cover gaps left by other federal aid.

The change won’t affect graduate students who took out a Grad PLUS loan before July 1, 2026. These students will have three more years to borrow Grad PLUS loans, with the same loan limits as in previous years.

New graduate students will still have access to unsubsidized federal loans, but the limits will vary by field of study.

‘Professional’ Graduate Students

A “professional” graduate student, as categorized by the Department of Education, is one earning a degree in pharmacy, dentistry, veterinary medicine, chiropractic, law, medicine, optometry, osteopathic medicine, podiatry, theology, and clinical psychology.

Professional graduate students can borrow up to $50,000 in unsubsidized loans every academic year. In total, these students can borrow up to $200,000 for their graduate degree.

‘Non-Professional’ Graduate Students

Any other graduate student is categorized as a “nonprofessional” student and has a stricter borrowing limit. These students can borrow up to $20,500 per academic year, with a total limit of $100,000.

‘Non-Professional’ Graduate Students

Any other graduate student is categorized as a “nonprofessional” student and has a stricter borrowing limit. These students can borrow up to $20,500 per academic year, with a total limit of $100,000.