The Best Alternatives for Grad PLUS Loans for Graduate Students

BIG Ideas:

• Grad PLUS loans are ending for new borrowers in July 2026 under the One Big Beautiful Bill Act.
• The bill also introduces new federal borrowing limits that may not fully cover the cost of high-priced programs like medical, dental, or law school.
• To bridge the gap, you may need to combine federal loans with other options, such as private graduate loans.

Whether you’re still in school or already out in the real world, college has taught you a lot of life lessons, like the fact that you actually can survive on just a few hours of sleep. But even before you set foot on campus, you probably learned an even more important one:

College is expensive.

And it’s not much better for students pursuing graduate or professional degrees. The average costs numbers below make that crystal clear:

Master’s degree: $51,740 (public) and $62,550 (private)¹

MBA: $60,410¹

Medical school: $228,959 (average for the class of 2025)²

Law school: $217,480³

That’s the not-so-good news. The good news is that an advanced degree is an investment in your future that can greatly increase your career potential and future earnings.

But to make that happen, you’ll need to figure out how to pay for it.

Financial aid and federal loans can definitely help bring down the cost of attendance. But often, there’s a gap where it leaves off. In the past, many students have turned to another federal loan to provide graduate school funding to bridge that gap: Grad PLUS loans.

The Grad PLUS loan is a Direct PLUS Loan offered by the US government to help professional students at schools that participate in the federal Direct Loan Program. It helps cover remaining education costs up to a school’s full cost of attendance after other aid is applied.

However, with the introduction of the One Big Beautiful Bill Act (OBBBA), signed into legislation on July 4, 2025, graduate student loan options may be limited. That’s because the Grad PLUS loan will no longer be an option for new graduate and professional student loan borrowers beginning on July 1, 2026.

And that’s not the only change. OBBBA also created new annual and aggregate federal borrowing caps for students, which could make graduate school financing more challenging for new borrowers.

What Do These Changes Mean to You?

If you are a new student applying for a graduate degree, such as an MBA (or other master’s degree) or a professional degree (such as law, dental, or medical degrees), the elimination of Grad PLUS loans and new federal borrowing limits may mean that federal aid no longer covers the full cost of attendance.

Depending on your program, that gap could be significant, especially for high-cost degrees like medical, dental, or law school. That means you’ll need to plan ahead and combine multiple graduate financing options to cover what’s left.

Let’s look at some other graduate loan options to help you cover graduate and professional degree costs.

Federal Direct Unsubsidized Loans

There is another type of loan offered by the government that can help you manage college costs – Direct Unsubsidized Loans. It’s essentially a federal loan that is not based on financial need. So, you won’t need to pass a credit check or meet a certain income level.

If you get a Direct Unsubsidized Loan for graduate or professional degrees, the government will not pay the interest for you while you are in school, as is the case with a Direct Subsidized Loan.

If you don’t pay interest while in school and choose to defer it, you’ll end up paying more money in interest fees, which can make that degree even more expensive.

But there’s an important caveat about these loans. They are now subject to new borrowing limits under OBBBA as follows:

Graduate degree students: $20,500 per year/$100,000 total.

Professional degree students: $50,000 per year/$200,000 total

Whether you qualify for the higher Professional degree limit depends on your professional degree.  You can check with your school to learn if your program is classified as a graduate or professional degree.

So, if you attend an expensive school and don’t receive enough aid, or if you don’t apply for scholarships and grants, you could end up with a gap in the cost of attendance.

That’s where your next option comes in: private graduate school loans.

Private Student Loans

Unlike an Unsubsidized Loan, which is offered by the federal government, private graduate loans are offered by banks, credit unions, and non-profit lenders like Brazos. There are, however, other key and important differences to understand before you apply for private graduate loans, including:

• They are based on your creditworthiness and income. So, if you don’t have a strong credit score or income, you’ll end up paying more to borrow. However, if you have exceptional credit or a co-signer with strong credit, you may be able to get a lower rate.

• They don’t offer the protections that come with federal student loans, including deferment, forbearance, and access to certain federal repayment options.

• They also may not be eligible for Public Service Loan Forgiveness if you meet the eligibility requirements.

• Rates, fees, and repayment terms can vary significantly by private lender, so shop around carefully.

Private graduate loans do offer one very big benefit: They let you borrow up to the full cost of attendance when federal aid and savings aren’t sufficient, helping you get around the new borrowing limits on federal loans.

But before you apply for one, be sure to exhaust all federal graduate student loan options, as well as scholarships and grants.

Other Ways to Make Graduate School More Affordable

• Apply for grants and scholarships. Free money is not just great; it’s your best friend when it comes to paying for college. It can reduce the cost of attendance and put more money where you want it – in your pocket.

• Seek fellowships. Many colleges and universities offer these merit-based awards that can greatly reduce tuition and other costs. Be sure to ask your school what may be available.

• Choose a school wisely. One of the biggest factors in the cost of graduate school is actually in your control. You can reduce tuition by choosing a public versus a private school and attending a school close to home that allows you to commute and save on room and board.

• Attend part-time and work. Earning while learning can help you lower costs and keep debt from piling up. Your company may even offer tuition reimbursement.

Brazos Can Help Make Grad School Affordable

For more than 40 years, Brazos Higher Education has helped students finance the cost of higher education. As a Texas nonprofit, we offer competitive rates on our private student loans that can help you get the advanced degree you want to build a brighter future. Contact us today.

¹Hanson, Melanie. “Average Cost of a Master’s Degree” EducationData.org, 2024-11-23, https://educationdata.org/average-cost-of-a-masters-degree

²Hanson, Melanie. “Average Cost of Medical School” EducationData.org, 2025-09-05, https://educationdata.org/average-cost-of-medical-school

³Hanson, Melanie. “Average Cost of Law School” EducationData.org, 2025-07-06, https://educationdata.org/average-cost-of-law-school