Grad PLUS vs Unsubsidized Loans: What Changed in 2026

For new borrowers, the Grad PLUS versus unsubsidized question ended on July 1, 2026: Grad PLUS was eliminated, and graduate students now borrow Direct unsubsidized loans only, capped at $20,500 per year and $100,000 total¹. If you are starting a graduate program now, unsubsidized is not the better option, it is the only federal one.

The question still matters for one group: continuing students under the interim exception, who can keep borrowing Grad PLUS through their expected time to credential. This page covers both situations, because the answer depends entirely on which one you are in.

Who Can Still Borrow Grad PLUS

The Department of Education’s guidance defines an interim exception, informally called the legacy borrower rule. You qualify if you were enrolled in your program of study as of June 30, 2026, and received a Direct Loan for that program before July 1, 2026². Qualifying borrowers keep the pre-2026 rules during their expected time to credential, which is the lesser of three academic years or the time remaining in the published program length.

For a qualifying graduate student, the old structure continues: $20,500 per year in unsubsidized loans against a $138,500 combined aggregate, plus Grad PLUS up to the full cost of attendance minus other aid². Three details from the guidance worth knowing:

• You cannot opt out. Legacy borrowers get the legacy limits, not a choice between the old and new sets.
• Withdrawing ends it. Leave the program, and eligibility for the exception ends with it. This includes losing enrolled status through academic suspension.
• Changing programs ends it too. The exception attaches to the specific program you were in, not to you. Start a different program and you are a new borrower under the new limits.

If that describes you, the comparison below is still live. If not, skip to the last section.

Grad PLUS vs Unsubsidized, for Those Who Still Have Both

Rate and fees. Unsubsidized graduate loans are at 8.07% for the 2026-27 award year; PLUS loans are at 9.07% ³. PLUS also carries a higher origination fee. Unsubsidized is the less expensive dollar every time, which is why the standard advice was always to exhaust unsubsidized eligibility first and use Grad PLUS for the remainder.

Repayment protections. Both are federal, with the same core protections: income-driven repayment options, deferment, and discharge on death or total disability. The differences that mattered historically concerned which repayment plans PLUS loans could access directly; check current plan rules at studentaid.gov against your specific loans rather than relying on any summary, including this one, because repayment plan terms have been in motion.

The strategic point for legacy borrowers. Grad PLUS during your remaining exception window is borrowing capacity that disappears on your program’s timeline, and loans received under the exception count toward the $257,500 lifetime maximum once the window closes². Borrow deliberately, not because the window is closing.

New Borrowers: Living Inside the Cap

Without Grad PLUS, a program priced above $20,500 a year cannot be fully federally financed, and the remainder is employer money, pacing, or private credit. That full decision tree is on graduate school loans, and the ordered gap options are on when federal loans are not enough. The one-sentence version: the cap has turned program price into a federal-eligibility question, so compare programs on total cost before comparing lenders on anything, and size any private remainder with the funding gap calculator rather than borrowing to the cost of attendance.

Professional students, such as those in medicine, law, and dentistry, have their own higher caps of $50,000 per year and $200,000 aggregate¹, with the same structure and the same lifetime maximum of $257,500 across all federal student borrowing.

This page is educational and is not financial advice, a loan offer, or a solicitation of credit. CollegeNPC.com is not a lender and does not take loan applications. Rates, fees, and eligibility criteria are set by lenders and change; verify current terms directly with any lender and with studentaid.gov before borrowing. The U.S. Department of Education and the Consumer Financial Protection Bureau both advise using federal student aid before considering private loans. Advertisements for loan products may appear on this page; see our advertising disclosure.