Core Insights - Starting from the 2026-2027 school year, graduate students will lose access to the Grad PLUS loan program, necessitating alternative financing options for their education [1][10] - The legislation has reduced the overall loan amounts available to students and their families for educational expenses [1] Affected Students - Approximately 545,000 graduate students utilized Grad PLUS loans in the 2024-25 award year, indicating a significant number will be impacted by this change [2] - Students who borrowed Grad PLUS loans before July 1, 2026, can continue to borrow for up to three more years or until their program concludes [3] - Non-professional graduate students will face a borrowing cap of $100,000, while professional students, such as those in medicine and law, can borrow up to $200,000 in unsubsidized loans throughout their education [3] Implications of Changes - The reduction in federal loan access may compel graduate students to seek more expensive loans with unfavorable terms, potentially leading to long-term financial distress [4] - The new borrowing limits replace a previous cap of $138,500, which applied to all graduate students, but the new limit for non-professional students is unlikely to affect many, as the average debt for these students is $80,550 [5] - Professional graduate students, particularly medical students with average costs of $232,100, may face significant financing challenges due to the loss of Grad PLUS loans [6] Alternative Financing Options - Experts recommend that graduate students explore scholarships and grants before resorting to loans, as well as employment opportunities at their universities [9][10] - Students working for companies should check for tuition reimbursement programs, which can provide up to $5,250 in tax-free education assistance [11] - The Lifetime Learning Credit allows eligible taxpayers to deduct up to $2,000 of education expenses from their taxes, providing additional financial relief [12] Private Loan Considerations - If federal loans and grants are insufficient, private student loans may be an option, but students should be cautious about the terms [13] - State and nonprofit lenders often offer loans with lower interest rates compared to private loans, making them a preferable choice [14] - Private loans can offer competitive rates and flexible repayment options, but borrowers must understand the details before committing [16][17]