2026–2027 Update: Grad PLUS Loans Eliminated for New Borrowers. As of July 1, 2026, new graduate students can no longer borrow Grad PLUS loans. Federal Direct Unsubsidized limits remain: $20,500/year (up to $100,000 lifetime) for most grad students, and $50,000/year ($200,000 lifetime) for professional students (law/medicine). Any costs above these federal limits must now be covered by private loans. If you borrowed a Grad PLUS loan before July 1, 2026 in your current program, you may continue under existing rules for up to 3 years.
Federal limits just changed. Private rates start under 5% with no origination fees. This guide walks you through the right borrowing sequence — so you graduate with less debt and more flexibility.
Follow these steps in order. Soft pulls first — protect your credit score while you shop. Hard pull last.
Every grad student qualifies for $20,500/year — no credit check, no co-signer required. Federal protections, IDR eligibility, and PSLF eligibility are built in. Take the full amount before considering anything else.
Apply in 3 minutes with no impact to your credit score. College Ave is consistently strong for high-FICO graduate borrowers and offers multiple repayment term options tailored to grad school timelines.
Run this simultaneously with Step 2. Earnest offers a 9-month grace period (3 months longer than most lenders), a rate match guarantee, and a skip-a-payment option once per year — features especially valuable during grad school transitions.
Sallie Mae requires a hard credit pull — save this for after you've seen your soft-pull offers. Known for highly competitive rates for strong-credit graduate borrowers, with coverage up to 100% of school-certified expenses including part-time students.
Line up every offer by APR (not just rate). Consider whether you need federal protections like PSLF or IDR before making your final choice. Note: Grad PLUS loans are no longer available to new borrowers as of July 1, 2026 — private loans are now the primary gap-filler above your federal Direct Loan limit.
The calculus for graduate borrowing is more complex. Your program type, career trajectory, repayment options, and the new federal caps all shape which loan is right for you.
As of July 1, 2026, Grad PLUS loans are eliminated for new borrowers. Federal Direct Unsubsidized limits are $20,500/year for most grad students, or $50,000/year for professional programs (law/medicine). Anything above those limits must come from private loans or other funding.
If you're pursuing a career in public service, government, or nonprofit work, Public Service Loan Forgiveness is only available on federal loans — never private. This may outweigh a lower private rate.
IDR plans (SAVE, PAYE, IBR) that cap payments at a percentage of income only apply to federal loans. If post-graduation income is uncertain, federal flexibility has real dollar value.
Unlike undergrads, many grad students refinance private loans after graduation once income is established — potentially dropping their rate significantly. This makes private loans more attractive for high earners.
With Grad PLUS eliminated for new borrowers, private loans are the primary option when federal Direct Loan limits don't cover your full cost of attendance. If your credit supports competitive rates, private loans starting under 5% with no origination fees are often the best available option.
Grad PLUS had a 9.07% rate plus a 4.228% origination fee — which meaningfully raised the true cost versus private loans. Now that Grad PLUS is eliminated for new borrowers, private loans with no origination fees are the clear alternative when federal limits don't cover your costs. Always compare by APR, not just stated rate.
These three lenders consistently offer the most competitive combination of rates, terms, and borrower-friendly features for graduate students specifically.
Soft Pull
Soft Pull
Hard Pull
Both types of loans have a role. The decision depends on your program, career goals, credit profile, and how much you need above the federal cap.
| Loan Type | 2026 Rate & Fees | Annual Limit | Key Benefits | ⚠️ Watch Out For |
|---|---|---|---|---|
| Federal Direct Unsubsidized ✓ Start Here |
~8.08% fixed No origination fee |
$20,500/year (grad) · $50,000/year (professional) Lifetime: $100K grad · $200K professional |
No credit check, federal protections, IDR eligible, PSLF eligible | Take the full $20,500 before anything else — always. |
| Private Graduate Loans Best for Strong Credit |
From ~4.5% fixed No origination fees (top lenders) |
Up to 100% of cost of attendance | No origination fees, competitive rates for good credit, faster approval | No IDR, no PSLF. Variable rates carry risk. Now the primary gap-filler above federal Direct Loan limits since Grad PLUS is eliminated for new borrowers. |
| Graduate PLUS Loan ⛔ Eliminated for New Borrowers |
9.07% fixed 4.228% origination fee |
Not available to new borrowers after July 1, 2026 | Federal protections, IDR eligible, PSLF eligible — legacy borrowers only (grandfathered for up to 3 years if same program) | Not an option if starting a new program after July 1, 2026. Grandfathered borrowers only: same program, borrowed before July 1, 2026. |
Rates and limits current as of 2026–2027 academic year. Grad PLUS loans eliminated for new borrowers effective July 1, 2026. Always verify at studentaid.gov and directly with lenders before applying.
CAP's complete lender comparison table covers rates, terms, fees, credit requirements, and key features across every major private lender. Updated April 2026.
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The most common questions we hear from graduate students navigating these decisions for the first time.
Our advisors work 1:1 with graduate students and their families to build a complete loan plan — comparing federal vs. private, total repayment cost, and how loans fit your specific career path.
Questions? support@collegeaidpro.com