Federal Loan Changes
Important changes to federal student loan programs are coming.
Significant modifications to federal student loan programs will occur beginning with the 2026-2027 academic year (effective July 1, 2026) as a result of of the One Big Beautiful Bill (OB3) Act being passed.
These changes primarily affect graduate/professional students and parents of undergraduate students. Please review the following updates if you and your family plan to use federal loans in the future (2026-27 or later).
Graduate & Professional Students
Elimination of Graduate PLUS Loan for New Borrower
Effective July 1, 2026, the Federal Direct Graduate PLUS Loan program will be eliminated for new borrowers. Graduate students will no longer be able to borrow up to the full Cost of Attendance (COA) minus other aid using federal loans alone, unless you qualify for the “Legacy Provision” (see below).
New Loan Limits
The legislation establishes new annual and aggregate (lifetime) limits for Direct Unsubsidized Loans, distinguishing between “Graduate” and “Professional” students.
Graduate Students (Master’s, PhD, etc.):
- Annual Limit: remains $20,500
- Aggregate Limit: Capped at $100,000 (does not include loans borrowed as an undergraduate)
Professional Students (Clinical Psychology, etc.):
- Annual Limit: Increased to $50,000
- Aggregate Limit: Capped at $200,000 (does not include loans borrowed as an undergraduate)
Note: The Department of Education is currently finalizing the specific list of programs that qualify as “Professional.”
Legacy Provision
Graduate students may continue to borrow under the current rules (including Grad PLUS Loans up to the Cost of Attendance) for up to 3 additional years if they meet BOTH of the following criteria:
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You are enrolled in the same credentialed program in 2026–27 that you were enrolled in prior to July 1, 2026.
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You borrowed a federal student loan (Subsidized, Unsubsidized, or Grad PLUS) for that specific program before July 1, 2026.
Graduate students who change programs or start a new degree after July 1, 2026 will be subject to the new limits.
Parents of Undergraduate Students
The Parent PLUS Loan will remain available but with new limits on borrowing amounts.
New Annual & Lifetime Limits
Starting in the 2026–27 academic year, Parent PLUS Loans will be limited to:
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Annual Limit: $20,000 per student, per year.
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Aggregate Limit: $65,000 per student total.
Currently, parents can borrow up to the full Cost of Attendance minus other aid. This new limit means some families may need to seek alternative financing such as private loans if their funding gap exceeds $20,000.
Legacy Provision for Parents
Parents may continue to borrow under the current rules (up to the full Cost of Attendance) for up to 3 additional years if both of the following criteria is met:
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The student they are borrowing for is enrolled in the same program they were attending prior to July 1, 2026.
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The parent borrowed a Parent PLUS loan for that student before July 1, 2026.
State Aid Updates
Recently, the State of Washington made budget changes that reduce funding for the Washington College Grant and College Bound Scholarship for students attending not‑for‑profit universities like SPU.
The good news: A new bill, Senate Bill 5828, is moving forward in the legislature. This bill aims to restore much of the funding that was cut. It was just advanced to the next stage in the Senate, which means progress is happening. The next deadline is February 17th.
It’s helpful when students share their voices. Joining the Save Student Aid email campaign or sharing your story on social media (Instagram, X, or LinkedIn) helps lawmakers understand why keeping this aid strong matters. You can also take action by contacting your State Senator and Representative and let them know you support restoring funding – click this link > Senate Bill 5828/ HB 2567.