Updates to Federal Graduate Student Loan Programs

Federal legislation enacted in July 2025 makes significant changes to how graduate and professional students can finance their education using federal student loans. These changes take effect July 1, 2026, beginning with the 2026–2027 academic year.

This page explains what is changing, who is affected, and how Drexel is supporting currently enrolled students as well as prospective and incoming students (financial aid disbursed on or after July 1, 2026).

• Overview: What is Changing?
• Definitions: Graduate vs. Professional Degree Programs
• Repayment Changes for New Borrowers
• Other Changes, Pending Final Regulation
• Information for Currently Enrolled Students
• Information for Prospective and Incoming Students
• Frequently Asked Questions (FAQs)

Overview: What Is Changing?

Financial aid for the 2025–2026 academic year is not affected.

Beginning July 1, 2026:

• The Federal Direct Graduate PLUS (Grad PLUS) Loan will be eliminated for new borrowers. (Consensus from ED's RISE committee.)
• New annual and lifetime federal loan limits will apply to graduate and professional students. The amount a student may borrow will depend on whether their degree program is classified as graduate or professional under U.S. Department of Education definitions.
• Federal loan eligibility for less‑than‑full‑time enrollment will be prorated starting in 2026–2027.
• Repayment options for new loans disbursed on or after July 1, 2026, will transition to a streamlined framework including the Repayment Assistance Plan (RAP).

Definitions: Graduate vs. Professional Degree Programs

Federal law now distinguishes between graduate and professional degree programs for loan borrowing purposes. These federal designations apply only to student federal loan eligibility and do not reflect Drexel University's academic classification of programs or the professional standing of any discipline.

As currently defined by the U.S. Department of Education (ED), professional degrees include:

• Pharmacy PharmD
• Dentistry DDS or DMD
• Veterinary Medicine DVM
• Chiropractic DC or DCM
• Law LLB or JD
• Medicine MD
• Optometry OD
• Osteopathic Medicine DO
• Podiatry DPM DP or PodD
• Clinical Psychology PsyD or PhD
• Theology MDiv or MHL

Graduate Degree Program

Students enrolled in graduate degree programs may borrow:

• Up to $20,500 per year in Federal Direct Unsubsidized Loans
• Up to $100,000 total (lifetime) in federal loans
• Up to $257,500 aggregate lifetime cap (all federal loans, including undergraduate, excluding Parent PLUS loans)

Examples of graduate programs offered at Drexel include:

• Master's degrees (e.g., MA, MS, MBA, MPH)
• Research and applied doctorates (e.g., PhD, EdD)
• Doctoral programs that do not meet the federal definition of a professional degree

Professional Degree Program

Students enrolled in professional degree programs may borrow:

• Up to $50,000 per year in Federal Direct Unsubsidized Loans
• Up to $200,000 total (lifetime) in federal loans
• Up to $257,500 lifetime cap (all federal loans, including undergraduate, excluding Parent PLUS loans)

Examples of programs offered at Drexel include:

• Medicine MD
• Law JD
• Optometry OD
• Clinical Psychology (PsyD and certain PhD programs)

Less‑than‑Full‑Time Proration

Beginning July 1, 2026, schools must prorate annual loan eligibility based on enrollment status if you are less than full‑time. Your annual loan availability may be reduced if you enroll part‑time or change your credit load after disbursement.

Repayment Changes for New Borrowers (Loans First Disbursed On/After July 1, 2026)

Repayment Assistance Plan:

• $10 minimum monthly payment for all borrowers
• Payments based on adjusted gross income and family size
• Ends access to certain economic hardship/unemployment deferments for future loans
• Borrowers with older loans may remain in legacy plans (subject to transition rules); ED has signaled a multiyear transition to new options

Other Changes, Pending Final Regulation

Beginning in 2026–2027, federal rules will include a minimum earnings test that may affect certain programs' eligibility for federal loans. While design details are still being finalized, ED has indicated an appeals process will allow institutions to present local labor-market or mission-specific evidence.

Drexel will monitor federal guidance and notify students if any Drexel programs become subject to additional federal accountability actions. 

How Drexel Is Supporting Graduate and Professional Students

Drexel University is actively responding to these federal changes by:

• Providing early and transparent financial counseling
• Sending clear communication to admitted and enrolled students
• Reviewing aid strategies, assistantships, and program structures
• Advocating for additional programs to be included in the definition of "professional programs", such as nursing and health professions programs
• Offering individualized guidance on borrowing limits, budgeting, and repayment planning through Drexel Central
• Providing ongoing updates as federal regulations are finalized, including updating this website 

Information for Currently Enrolled Students

You May Be Eligible for Legacy (Grandfathered) Borrowing

Students already enrolled in a graduate or professional program may be able to continue using current federal loan rules — including Grad PLUS — for a limited time.

You may qualify if:

• You borrowed a federal student loan for your current program before July 1, 2026
• You remain enrolled in the same credentialed program

Eligible students may continue borrowing under existing rules for up to three additional years or until program completion, whichever comes first.

Important: Taking a leave of absence, changing programs, degrees, or institutions after July 1, 2026, will result in the loss of legacy eligibility.

Recommendations for Current Students

• Consult Drexel Central before changing programs or taking a leave of absence.
• Review your aggregate borrowing against the new $100k/$200k caps and the $257,500 cap.
• Consider course planning that supports on-time completion and minimizes part-time proration impacts.
• Legacy Provision: If a borrower has a Federal Direct Loan made before July 1, 2026, while enrolled in a program of study, the current loan limits continue to apply" for three academic years or the remainder of their expected time to credential, whichever is less.

Information for Prospective and Incoming Students (On/After July 1, 2026)

Students who begin a new program on or after July 1, 2026, will be subject to the new federal loan limits and will not have access to Grad PLUS loans.

What This May Mean for You

• Federal loans may not cover the full cost of attendance
• Careful planning for tuition, living expenses, and program length is essential
• Some students may need to combine federal loans with:
  • Institutional scholarships or fellowships
  • Graduate assistantships
  • Employer tuition benefits
  • Personal savings
  • Private educational loans

Recommendations for Prospective Students

• Review total program cost (not just tuition) and time-to-degree
• Ask about paid assistantships
• Compare projected debt with expected earnings in your field
• Apply early for scholarships, fellowships, and aid

Additional Resources

• Federal Student Aid
• NASFAA – Graduate Loan Updates
• Congressional Research Service Summary
• Drexel Central

Questions?

Students are encouraged to contact Drexel Central:

• Email: askdrexel@drexel.edu
• Phone: 215‑895‑DREX (3739)
• Appointments

Staying informed and planning ahead are the best ways to navigate these important changes successfully.

If ED issues technical corrections or adjusts timelines (e.g., implementation delay to July 2027), Drexel will update this page and notify affected students by email and through program offices.