Federal Student Loan Limits Are Changing: Why We Partnered with College Ave to Help Prepare Students

For many students and families, paying for college requires planning, savings, scholarships, grants, federal aid, and sometimes private financing. Now, upcoming federal student loan changes are making that planning conversation even more important, especially for graduate students, professional students, and parents who have historically relied on federal PLUS loans to help cover the full cost of attendance.

What’s Changing in Federal Student Loan Borrowing

Beginning July 1, 2026, several federal student loan rules are scheduled to change under the One Big Beautiful Bill Act. The Department of Education has noted that the changes affect loan limits and repayment options for borrowers and will continue to provide implementation guidance. 

• Graduate student borrowing is expected to be limited to $20,500 per year, with a $100,000 aggregate cap for the degree.
• Professional student borrowing is expected to be limited to $50,000 per year, with a $200,000 aggregate cap for the degree.
• Parent PLUS borrowing is expected to be capped at $20,000 per year and $65,000 total per student.
• Graduate PLUS loans are expected to be eliminated for new borrowers, changing how many students fund advanced degrees.

Why Federal Student Loan Limits Matter for Students and Families

These changes do not eliminate the need for education financing; they change the order and urgency of the conversation. Families may need to compare school costs earlier, understand borrowing limits sooner, and identify responsible ways to close any remaining funding gaps after scholarships, grants, savings, and federal student aid have been considered. 

For undergraduate families, the Parent PLUS cap may affect households that are expected to use federal parent borrowing to cover costs above the student’s direct federal loan eligibility. For graduate and professional students, the change may be even more significant because many programs have tuition and living expenses that exceed the new annual and aggregate limits. 

Why We Partnered with College Ave

Guaranty Bank chose to partner with College Ave because individuals need clear, flexible options at a time when education financing is becoming more complex. College Ave focuses on private student loans for undergraduate students, graduate students, professional degree students, and parents, with an online application process, no origination fees, fixed and variable rate options, and repayment choices designed to fit different budgets. 

Just as important, College Ave positions private student loans as a potential way to fill a financing gap after students and families have explored scholarships, grants, savings, and federal student aid. That approach aligns with how we believe education financing should be discussed, starting with the lowest-cost and individually tailored options, then evaluating private financing only when it makes sense for the borrower’s broader financial plan. All private student loans are subject to credit approval, underwriting requirements, and program eligibility criteria.

What Families Should Do to Start the Student Loan Application Process

• File the FAFSA and review all federal aid eligibility first. 
• Ask the school’s financial aid office how the new federal loan limits may apply to the student’s program and enrollment timeline. 
• Compare the total cost of attendance, not just tuition, including housing, books, fees, transportation, and required equipment. 
• Estimate the funding gap after scholarships, grants, savings, income, and federal loans. 
• If a gap remains, compare private loan options carefully, including rate type, repayment term, monthly payment, cosigner requirements, fees, and total cost over time. 

How to Learn More About College Ave

As federal loan rules evolve, our goal is to help students and families make informed, confident decisions. Partnering with College Ave gives us another way to support those conversations with tools and financing options that may help bridge the gap when federal aid, savings, and scholarships are not enough.  This is a pivotal time for proactive planning. If college, graduate school, or professional school is on the horizon, it is important to learn more about the new federal limits. Visit our College Avenue information page and explore the full range of responsible funding options available to you.

*Guaranty Bank & Trust may receive a referral fee if you click on this link and obtain a student loan from College Ave.