Federal Student Loan Limits to Change in 2026-27, Impacting Borrowing for Parents and Graduate Students
WASHINGTON D.C. – Important changes are coming to federal student loan programs beginning in the 2026-27 academic year, with new caps on Parent PLUS loans and the introduction of a lifetime borrowing limit for all federal student loan types. These adjustments, stemming from recent legislation, are poised to reshape how families finance higher education, particularly for graduate students and those relying on parental borrowing.
The updates introduce an annual borrowing limit of $20,000 for Parent PLUS loans, with a total aggregate limit of $65,000 per student. Simultaneously, a new $257,500 aggregate lifetime limit will apply to the total outstanding principal balance of all federal student loans combined – encompassing subsidized, Unsubsidized, and Grad PLUS loans. These changes mean some families may need to explore alternative financing options like private loans or tuition payment plans to cover the full cost of attendance.
Currently, parents can borrow up to the full Cost of Attendance minus other aid. The new annual and aggregate limits on Parent PLUS loans will require some families to seek alternative funding if their financial gap exceeds the new thresholds.Graduate students, who often rely heavily on federal loans, will also be directly impacted by the new lifetime borrowing cap.
A “Legacy Provision” offers a temporary reprieve for some. Parents who have already borrowed a Parent PLUS loan before July 1, 2026, and whose student remains enrolled in the same program, may continue to borrow under the current rules – up to the full Cost of Attendance – for up to three additional years.
To prepare for these changes, borrowers are advised to:
- Check Your Loan History: Review current loan balances via StudentAid.gov.
- Understand Your Status: Determine eligibility for the Legacy Provision.
- Plan for the Gap: Research private loan options or personal savings if anticipated costs exceed new federal limits.
The Office of Student Financial Aid is actively monitoring guidance from the Department of Education and will provide updates as final regulations are released. The changes are currently slated to take effect for the 2026-27 academic year.
