This federal student loan program ends soon. Here’s what that means for SC college students

A federal student loan program is being phased out on July 1, impacting nearly half a million students per year who rely on the direct loan for their school’s attendance costs.

The U.S. Department of Education will discontinue Grad PLUS Loans, a type of Direct PLUS Loan, for new borrowers and will place stricter borrowing limits on graduate students, almost a year after Trump’s signature One Big Beautiful Bill was signed into law on July 4, 2025.

Graduate students may not find the law as beautiful, as it puts a halt to the federal direct loan program that allowed them to fund up to the total cost of attendance of their school, no matter how expensive it was, minus any other financial assistance received, with no lifetime aggregate cap. The federal loans helped graduate and professional students pay for their education for 20 years.

The Trump administration fought to change the current higher education financing options due to the nation’s staggering student loan debt. According to the latest data from the Education Data Initiative, an independent education research group, national student debt reached $1.833 trillion in 2025, and there were over 42.8 million borrowers. There was a decline in student debt between 2023 and 2024, but annual growth resumed since then.

Additionally, federal student loan debt represents 90.9% of all student loan debt, and 10.0% of federal student loan dollars were delinquent as of 2025’s fourth financial quarter.

Under the new limitations, Grad PLUS Loans will be unavailable for new graduate student borrowers after July 1, and current recipients of federal financial aid will see caps on how much they can borrow. Here’s everything borrowers should know:

Changes for borrowers

If you already borrowed a Graduate PLUS Loan for your current program of study before July 1, 2026, you can continue borrowing for up to 3 more years (or until your program ends), according to the Pennsylvania Higher Education Assistance Program, a leading student aid organization in the nation.

Graduate students will still have access to federal financial aid through the Federal Direct Loan Program, but the amount they can borrow will be limited and will differ based on what program they’re in:

• Up to $20,500 per year and a $100,000 lifetime borrowing limit for graduate programs
• Up to $50,000 per year and a $200,000 lifetime borrowing limit for professional programs

The following programs qualify as professional programs:

• Pharmacy (Pharm.D.)
• Dentistry (D.D.S. or D.M.D)
• Veterinary Medicine (D.V.M.)
• Chiropractic (D.C. or D.C.M.)
• Law (L.L.B. or J.D.)
• Medicine (M.D.)
• Optometry (O.D.)
• Osteopathic Medicine (D.O.)
• Podiatry (D.P.M., D.P., or Pod.D.)
• Theology (M.Div. or M.H.L.)
• Clinical Psychology (Psy.D. or Ph.D.)

Notably, the following professions aren’t considered professional programs, meaning student borrowers will be restricted to lower loan limits:

• Nurses
• Social workers
• Educators
• Physical therapists

This comes as South Carolina is already facing a shortage of qualified nurses, which will worsen over time, according to a report from the Health Resources and Services Administration. Limiting the amount of loans a student can borrow may prevent them from finishing a degree.

What SC borrowers should do now

Education is one of the most important aspects of a person’s life, so it’s important to take steps that will lessen the impact of this student loan change. The PHEAA provided these tips for borrowers:

• Make sure you remain enrolled in a degree program to continue using the Graduate PLUS program (if applicable)
• Review your annual and lifetime total borrowing needs—the new lending caps are strict
• Talk to your Financial Aid Office to find out if they plan to impose institutional loan limits
• Review your current repayment plan options
• Learn as much as you can about the Repayment Assistance Plan (RAP), because you cannot change to another plan after choosing this one
• Consider private education loan programs from SC Student Loan