Recently, after a church meeting, while sharing coffee, one church member smiled as they mentioned their second child received an acceptance letter to medical school, but their expression quickly turned serious. As soon as the topic of student loans came up, they said, "I heard that loan is no longer available."

That's correct. The federal Grad PLUS loan, which allowed graduate students to borrow up to the full cost of tuition, will no longer be available to new borrowers starting July 1, 2026.

This change is based on the One Big Beautiful Bill Act signed on July 4, 2025. Until now, families sending kids to medical or law school typically used all available federal unsubsidized loans and filled in the gaps with Grad PLUS loans.

That formula has now been disrupted. Instead, new annual and cumulative limits have been established for each graduate program.

General graduate students can borrow up to $20,500 per year, with a cumulative limit of $100,000. This applies to master's and general doctoral programs.

For professional degree programs like medical or law school, students can borrow up to $50,000 per year, with a cumulative limit of $200,000. Additionally, there is a separate lifetime limit of $257,500 that includes any federal loans borrowed during undergraduate studies.

School guidance documents explain that Parent PLUS loans taken out by parents do not count toward the lifetime limit. However, if a child has borrowed significantly during their undergraduate years, it means they will have less available for graduate school, so it's important to consider this in advance.

So, which programs are recognized as "professional degrees"? The Department of Education's final rule defines this scope to include medicine, osteopathic medicine, dentistry, veterinary medicine, pharmacy, optometry, podiatry, chiropractic, law, theology, and clinical psychology.

Nursing graduate programs are not included in this list. Therefore, master's or doctoral programs in nursing will be subject to the same $20,500 annual limit as general graduate programs.

This aspect has sparked significant backlash. On May 19, attorneys general from 24 states filed a lawsuit in federal court challenging this rule, and nursing organizations have also announced plans for separate lawsuits.

While there may be changes depending on the outcome of the lawsuits, it's advisable to base current plans on the existing rules. Waiting for results and missing registration deadlines could lead to greater losses.

Let's look at the numbers side by side. According to AAMC data, the median total cost of tuition and living expenses for the graduating class of 2026 medical students is $297,745 for public schools and $408,150 for private schools.

Compared to the cumulative limit of $200,000, public schools fall short by over $97,000, and private schools exceed $200,000. I calculated this myself and was momentarily speechless.

Of course, these are median values, and costs vary by school and the amount of scholarships received. However, you should consider that the path to completing education solely with federal loans is effectively closed.

That said, existing students will not be cut off immediately. There is an exception for current students, often referred to by schools as "legacy" or "temporary exceptions."

If a student was enrolled in their program as of June 30, 2026, and had received a federal direct loan for that program before July 1, they can continue to borrow under the old rules. The duration is the shorter of three academic years or the remaining expected duration of study.

There are also precautions to consider. According to various school guidance documents, changing programs or taking a semester off may void this exception.

If a student previously used Grad PLUS in another program but starts a new program after July, they will not be able to receive Grad PLUS for the new program. Each school may have slightly different interpretations, so be sure to confirm in writing with the financial aid office of the respective school.

I often hear the question, "Can't parents just borrow instead?" However, Parent PLUS loans are originally intended for dependent undergraduate students, so they cannot be used for graduate students' tuition.

Moreover, starting July 1, the Parent PLUS loan limits for undergraduates will be capped at $20,000 per year and a cumulative limit of $65,000 for the first time borrowed per child. This means the financial burden structure has changed starting from the four years of undergraduate studies before attending medical school.

So where will the shortfall be covered? The first place to look is the school's own scholarships and institutional loans. Some schools have indicated they will increase support following the limit changes, so once you receive acceptance notifications, be sure to compare financial aid packages carefully.

If you live in an area with many families connected to the military and federal government, it might be worth exploring the military medical scholarship program (HPSP). In exchange for tuition support, there is a service obligation after graduation, so be sure to discuss this thoroughly with your child.

Consider private loans as a last resort. Unlike federal loans, interest rates and repayment terms can vary significantly based on credit and co-signers, and if parents co-sign, that debt becomes entirely their responsibility.

Personally, I understand the rationale behind this change. The argument that unlimited borrowing leads to rising tuition has been made for a long time.

However, if that gap simply shifts to private loans, students will end up borrowing at a higher cost. It will take a few years to see if tuition actually decreases.

The advice I gave to that church member was straightforward. I suggested they create a table comparing the total four-year costs and scholarships for each accepted school and check the amounts that are not covered by the $200,000 federal loan.

Since loan terms and family financial situations vary from household to household, it's essential to consult with the school's financial aid officer or a financial expert before making any decisions. Official information can also be found at studentaid.gov.

If you know families with children about to enroll, please share this information with them. Just knowing in advance can significantly broaden their options.