Grad PLUS Loans Are Gone — Here's How to Fund Your Master's or PhD Without Them
The Grad PLUS Loan program was eliminated July 1, 2026, capping most master's students at $20,500/year in federal borrowing — making scholarships, fellowships, and employer tuition benefits the primary tools for closing the gap.
The Rule Change That Reshapes Graduate Borrowing
Starting July 1, 2026, the Federal Direct Grad PLUS Loan program is gone for new borrowers. What replaced it are hard annual caps: $20,500 per year for most master's students (with a $100,000 aggregate limit) and $50,000 per year for law and medical students (capped at $200,000). Before this change, Grad PLUS let you borrow up to the full cost of attendance — tuition, rent, groceries, all of it. That backstop no longer exists. Graduate tuition alone runs about $21,110 per year at private institutions, according to NCES data for 2024-25, and that figure doesn't include housing or food. If you're starting a two-year private-school master's program this fall as a new borrower, federal loans will not cover your costs. That gap is now your problem to solve before you enroll, not after.
“"The gap between what school costs and what you can borrow is the gap that grad school scholarships now have to fill." *— Spot Scholarships, July 2026*”
PhD vs. Master's: Two Completely Different Funding Realities
If you're considering a doctoral program, here's the most important thing to understand: you are not expected to pay for a PhD in the United States. Admitted doctoral students in sciences, engineering, humanities, and social sciences typically receive full tuition remission plus a living stipend — often for five or more years. About 40 percent of doctoral students hold a graduate assistantship (teaching, research, or administrative work) that covers tuition and pays a stipend. Schools like the University of Michigan and the University of Connecticut publish tiered remission schedules that spell out exactly what you get. If a PhD program admits you without a funding offer, treat that as a warning sign about how much they want you there.
Master's students are in a harder spot. Assistantships are comparatively rare at that level, which is why the elimination of Grad PLUS hits master's borrowers the hardest — they already
This issue draws on reporting and data from Spot Scholarships.