New student loan limits are here. Here’s what to do when federal aid isn’t enough.

Many students use student loans to cover at least some of their education costs, but new federal loan borrowing limits may affect students’ financing options. The One Big Beautiful Bill Act (OBBBA) established new limits for undergraduate, graduate, and parent borrowers, and changed what loans are available.

If you reach the maximum allowed in federal loans, private student loans can make it possible to finish your program and earn your degree. Here’s what to consider as you weigh your options.

What are the new limits on federal student loans?

The OBBBA changed aggregate and lifetime borrowing limits*, and established new caps for graduate or professional and parent borrowers.

*Loan limits apply to federal student loans disbursed on or after July 1, 2026

Limits for undergraduate borrowers

For undergraduate borrowers, the annual borrowing limits are unchanged for both Direct Subsidized and Direct Unsubsidized Loans. The maximum you can borrow depends on your year and dependency status, though most undergrads qualify as dependent students.

Limits for graduate or professional borrowers

Some of the most notable changes from the OBBBA affect graduate and professional borrowers.

Previously, graduate or professional students could use grad PLUS loans to cover up to 100% of the total cost of attendance of their programs, with no maximum limit. The OBBBA eliminated the grad PLUS loan program, so the only option for these students is now a Direct Unsubsidized Loan.

Your degree type affects how much you can borrow. For most graduate borrowers — which includes master’s degrees, MBAs, and Ph.D. programs — the new cap is $20,500 per year, with a $100,000 aggregate limit. Your undergrad loans are not counted toward the $100,000 limit.

Professional students can borrow up to $50,000 per year, with a $200,000 aggregate limit. However, only a select number of fields are categorized as “professional” and qualify for the higher borrowing limit. Eligible degrees include:

Chiropractic Medicine (DC, DCM)
Dentistry (DOS, D.MD)
Law (LLM, JD)
Medicine (MD)
Optometry (OD)
Osteopathic Medicine (DO)
Pharmacy (Pharm.D)
Podiatry (DPM, DP, Pod.D)
Theology (M.Div, MHL).
Veterinary Medicine (DVM)

*Undergraduate loans are not counted toward this total.
**Undergraduate loans are not counted toward this total, but graduate loans are.

Limits for parent borrowers

Parents could previously use parent PLUS loans to cover up to 100% of the total cost of attendance for their children’s undergraduate education. The OBBBA instituted new annual and lifetime caps on how much parents can borrow per student.

Annual limit: $20,000 per student
Aggregate limit: $65,000 per student

Lifetime borrowing limits

Under the OBBBA, there is also a new lifetime limit for student borrowers. This new limit of $257,500 includes all Direct Subsidized and Unsubsidized Loans for undergraduate, graduate, and professional study.

Are there exceptions to the new borrowing limits?

There are some exceptions to the new loan limits. If you’re eligible for an exception, you’ll qualify for the previous loan types and loan limits for three academic years or for the remainder of your degree program, whichever is less.

Graduate or professional students: You may qualify for an exception if you were enrolled in a program by June 30, 2026, received at least one Direct Loan for the same program prior to July 1, 2026, and remain enrolled in the same program at the same institution.
Parent borrowers: You can qualify for parent PLUS loans and borrow up to the total cost of attendance if your child was enrolled by June 30, 2026, received at least one federal Direct Loan prior to July 1, 2026, and is still enrolled at the same institution.

If you drop out of your program, transfer schools, or take an unapproved leave of absence, you may no longer be eligible for the exception. Consult with your financial aid office if you have specific questions about your eligibility.

How do the new limits affect part-time students?

For students who are enrolled on a part-time or half-time status, the annual borrowing limits are proportionally reduced based on your level of enrollment.

How do private student loans work?

Available from credit unions, banks, and private financial institutions, private stude nt loans can play an important role in financing your degree. However, private loans only make up a small slice of the student loan market — they account for less than 8% of total student loan debt, according to Enterval Analytics.

These loans differ from federal student loans in several key ways.

1. Eligibility criteria

While federal loans are available to borrowers regardless of income or credit score, private student loan companies have stricter requirements. You typically need to meet the lender’s income and credit requirements, or most students need a creditworthy co-signer (such as a parent or relative) to apply with you.

That difference can be a hardship for low-income households or for those without a relative with good credit. Without a co-signer, it can be difficult to qualify for a private loan at all.

2. Borrowing limits

Federal student loans have strict caps on how much you can borrow per year and over your lifetime. By contrast, private student loans tend to have higher caps, and many lenders allow you to borrow up to the total cost of attendance.

3. Interest rates

Federal student loans always have fixed rates, which never change. Private student loans can have fixed or variable rates. Variable rates can fluctuate over time, mirroring broader economic trends.

In general, private student loans have higher interest rates than federal loans.

4. Repayment options

Federal student loans usually have grace periods, meaning you have six months after graduating or dropping below half-time status before you have to make your first payment.

With private student loans, grace periods are common but not guaranteed. Some lenders require you to make payments while you’re in school, though you may be able to make payments that only cover the interest until after you graduate.

Private loans also have different repayment terms; you can usually choose a term between five and 15 years.

5. Financial hardships

The biggest benefit of federal loans is their borrower protections. If you can’t afford your payments, you could qualify for income-driven repayment plans. You may be eligible for a deferment or forbearance if you lose your job or become ill.

Private loan financial hardship policies vary by lender; not all lenders offer alternative payment options. If you’re struggling to afford your payments, your lender might not do much to help you.

See our picks for the best private student loans of 2026.

What other financial aid options are available?

Private student loans can help you cover the remaining costs and finish your degree. But due to their higher rates and stricter repayment terms, make sure you exhaust other forms of financial aid first:

Institutional aid: Check with your school’s financial aid office to see if you qualify for any forms of institutional aid, such as college grants or loans.
Employer tuition reimbursement: If you have a job, your employer may cover some of your tuition costs. Talk to your human resources department to find out if you qualify for this perk.
Grant and scholarship programs: You may be eligible for grants or scholarships from your state, nonprofit organizations, or private companies. Visit your state education agency and use scholarship search tools like FastWeb to find potential opportunities.
529 plans: If you have a 529 account open, you can use the funds to cover some of your undergraduate and graduate expenses. And, if you have a sibling who has a 529 and who didn’t use the whole balance, the account holder can change the beneficiary to you, allowing you to use the remainder for your education.

New student loan limits are here. Here’s what to do when federal aid isn’t enough.