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Important Federal Loan Changes Coming in 2026

What Current and Prospective Students Need to Know

Update for Prospective Students

Enroll Now to Secure Current Graduate Loan Benefits Before Federal Changes Take Effect in 2026

Beginning July 1, 2026, major federal changes will limit how graduate students can finance their education—making now the best time to enroll and secure access to current loan options. The Graduate PLUS Loan program will be eliminated for new borrowers, and federal Direct Loan limits will be capped at $100,000. However, students who enroll and begin borrowing before July 1, 2026 will be grandfathered into the existing, more flexible programs—retaining access to Graduate PLUS Loans that can cover the full cost of attendance, along with current loan limits and repayment options through June 30, 2029 (or until program completion). To take full advantage of these benefits, consider starting your program by Spring or Summer 2026, apply early for financial aid, and connect with Pepperdine Graziadio’s Financial Aid Office to discuss your individual options. Don’t miss this opportunity to maximize your financial aid and invest in your future under today’s more favorable terms.

Update for Current Students 

Effective July 1, 2026

Significant changes to federal student loans were recently enacted through the Working Families Tax Cuts Act. These changes will affect how graduate and professional students finance their education beginning on July 1, 2026.

Please review this message carefully, as it outlines how the new rules may apply to you.

Important Notes:

  • For purposes of these changes all Pepperdine Graziadio Business School students are classified as Graduate students.

Key Changes

1. Elimination of the Graduate PLUS Loan Program: Beginning July 1, 2026, the Federal Graduate PLUS Loan program will be discontinued for new borrowers.

  • Legacy Provision: Students who have a Graduate PLUS Loan disbursed before July 1, 2026 and continue to be enrolled at Pepperdine Graziadio Business School in the same program may continue borrowing $20,500 of Direct Unsubsidized Loans and Graduate PLUS Loans up to the full cost of attendance through June 30, 2029 or until the end of their program, whichever comes first.

2. New Annual and Aggregate Loan Limits for New Borrowers AFTER June 30, 2026: Students who have not received a Direct Unsubsidized Loan disbursement before July 1, 2026 (“new borrowers”), will be subject to the following new Direct Unsubsidized Loan limits:

  • Annual and Aggregate (lifetime) limits:

    • Graduate: $20,500 annual; $100,000 aggregate
    • Combined graduate + professional borrowing: capped at $200,000
    • A separate lifetime limit of $257,500 applies to all federal student loans (excluding Parent PLUS loans borrowed on your behalf)
    • Note: Graduate PLUS Loans will NOT be available to new borrowers.
  • Legacy Provision: Graduate and Professional students who have a Direct Unsubsidized Loans or Graduate PLUS Loan disbursed before July 1, 2026 and continue to be enrolled at Pepperdine GSEP in the same program may continue borrowing $20,500 of Direct Unsubsidized Loans and Graduate PLUS Loans up to the full cost of attendance through June 30, 2029 or until the end of their program (expected time to credential), whichever comes first. Program withdrawals, unapproved leaves, or switching to a different graduate degree program will immediately terminate the legacy status.

3. Proration of Loans Based on Full-Time or Part-Time Enrollment: Beginning July 1, 2026, Unsubsidized loan borrowers enrolled less than full-time will be eligible for prorated loan amounts proportional to their enrollment status.

What This May Mean for You

Pepperdine Graziadio Business School’s Office of Financial Aid does not encourage or discourage borrowing. However, we are committed to equipping you with the information and support you need to make sound financial decisions.

Here are some scenarios that may apply to you:

  1. If you are a Pepperdine Graziadio Business School student and you have borrowed or will be borrowing Graduate PLUS Loans this upcoming 2025-26 Academic Year: You are covered under the legacy provision and may continue borrowing Graduate PLUS Loans up to the full cost of attendance through June 30, 2029, or the end of your current program, whichever comes first.
  2. If you are a Pepperdine Graziadio Business School student who has not yet borrowed a Direct Unsubsidized Loan and a Graduate PLUS Loan and anticipate needing to borrow more than $20,500 after this academic year: Borrowing Graduate PLUS Loans during this 2025-26 academic year will preserve your eligibility to continue to borrow up to the full cost of attendance beyond July 1, 2026 under the legacy provision.
  3. If you are Pepperdine Graziadio Business School student who has not borrowed a Direct Unsubsidized Loan for your current program: Your annual borrowing cap will be $20,500. This limit will remain in effect for the duration of your program. (Please note that this cap is not new. What is new is that unless you have borrowed Graduate PLUS Loans for this program, the $20,500 of Direct Unsubsidized Loans will be the only federal student loan available to you. If you think you will need more than $20,500 after this academic year, see #3 above.

Private Loans

Private education loans are offered by banks, credit unions, and state-based non-profit lenders. These loans require a credit check, and a creditworthy co-signer is highly recommended (and often required) to secure the best interest rates. When choosing a private lender, we encourage you to ask the following questions:

What is the interest rate? Is it fixed or variable?*
What fees must be paid and when are they due?
What are the repayment terms? Is there a grace period? Are there deferment or forbearance options?
What will my monthly payment be?
Do I need to be admitted to a degree or certificate program?
Do I need to be enrolled at least half-time?
Is there a satisfactory academic progress requirement?
Can the loan be applied to cover a balance from past periods of enrollment? 

*We encourage you to consider the rate you are offered, not the advertised interest rate.

 

 

Financial Guidance Resources

If you have any questions please reach out to the Financial Aid Office:

Phone: 310.568.5530 (option 1)
Email: PGBSFinancialAid@pepperdine.edu