Navigating Graduate School Finances After July 1, 2026

Are you considering graduate school in the coming years? If so, this week's episode of Victors in Grad School unpacks one of the most important (but often overlooked) aspects of your journey: how to plan, budget, and best position yourself financially amidst sweeping federal student lending changes that took effect after July 1, 2026. Hosted by Dr. Christopher Lewis, this episode is a must-listen for anyone serious about making smart financial choices on the path toward an advanced degree.

Dr. Christopher Lewis wastes no time highlighting why recent changes to federal lending policies should be front and center for every prospective grad student. He explains that, as of July 1, 2026, federal student loan programs for graduate and professional students have undergone major reforms affecting how much you can borrow, which loan options are available, and how to prepare for the true cost of your education. Gone is the safety net of the Graduate PLUS loan program—once a bridge for many students needing to close the gap between standard loans and sky-high tuition. Now, a new landscape of annual, aggregate, and lifetime borrowing caps means that meticulous financial planning is non-negotiable (03:41; 06:26).

But it's not just about losing borrowing options. Dr. Christopher Lewis breaks down critical distinctions between graduate and professional degree programs, each with different borrowing limits, and cautions that these definitions may evolve as legal battles play out (08:53). He encourages listeners to go beyond the "sticker price" and get a true net cost projection that includes tuition, supplies, housing, licensure fees, and the program's average completion time (09:45; 10:31).

The episode offers actionable tips: talk to your financial aid office, request full cost breakdowns, and explore institutional scholarships, assistantships, or employer tuition benefits before turning to private loans. If you do have to go the private route, Dr. Christopher Lewis provides a checklist of essential questions to ask lenders and emphasizes the risks compared to federal loans (14:35).

The main message? Financial preparedness is now more crucial than ever for graduate school success. Dr. Christopher Lewis invites you to be proactive, ask tough questions, and keep revisiting your plan as circumstances change (18:42). Graduate education is still a powerful investment—but you must approach it with eyes wide open and the right resources.

Ready to dive deeper and get the confidence you need to make informed financial decisions about grad school? Tune in to this timely episode of Victors in Grad School—your future self will thank you!

TRANSCRIPT

Dr. Christopher Lewis [00:00:02]:
Welcome to Victors in Grad School, where we have conversations with students, alumni, and experts about what it takes to find success in graduate school. Welcome back to Victors in Grad School, where every week we have a great opportunity to be able to work together on helping you to find success in that journey that you're on toward graduate school yourself. And today, you and I are going to talk. We're going to delve a little bit more into some of the things that can help you, especially as it relates to some of the major federal student lending changes that have recently come about that may impact your ability to get financial aid now that we're past July 1st, 2026. Now, I know that the federal lending policy may not sound like the most exciting topic at first. It's not exactly the kind of thing people bring up at dinner parties. But if you are thinking about graduate school, this really matters. It matters because graduate education is a major investment.

Dr. Christopher Lewis [00:01:10]:
It can help you advance in your career, increase your earning potential, enter a licensed profession, shift into a new field, or pursue work that is— intellectually and personally meaningful to you, but it also requires planning. And you see, starting on July 1st, 2026, federal student loan policies for graduate and professional students have substantially changed in ways that will impact your ability to borrow, budget, and to decide on ultimately which program that you're going to want to attend. So today what we're going to be doing is talking about what has changed, why it matters, and what you need to be thinking about to be able to prepare and to think differently about your education. Now, as always, this episode is meant to help you to ask better questions and inform decisions. For your own individual financial situation, though, I highly, highly encourage you that you need to be talking to your own university's financial aid office. your loan servicer, and official federal student aid resources. So with that being said, let's get started. So why does this matter? Why does it matter and why should you stay up to date? Well, as of July 1st, 2026, federal student aid policies related to graduate borrowing shifted significantly.

Dr. Christopher Lewis [00:02:32]:
These changes ultimately are affecting how much you can borrow, whether certain loan programs are available, And how you have to plan for the full cost of your education. That means that as a prospective graduate student, you need to ask more than, can I get admitted? You also have to ask, can you afford to complete the program? And that's an important distinction. Getting admitted to graduate school is exciting and it should be celebrated, but admission alone does not answer the financial questions. Students need to understand the total cost of attendance, Available funding, federal loan eligibility, potential gaps in that eligibility or gaps in the funding that's available to you, the repayment options that are available to you, and likely career outcomes as well. And this is especially true in a changing lending environment. If you're considering graduate school for 2026 or beyond, you have to make sure that you are using current information because policies can change, institution costs can change, loan limits can change, and repayment rules can change. So one of the first pieces of advice that I'd give you, it's simple. Stay up to date.

Dr. Christopher Lewis [00:03:41]:
You need to visit trusted resources. You need to talk with your financial aid professionals at your institutions. You need to ask questions of the programs directly and revisit your financial plan as you identify and learn new information. Because a graduate degree can still be a strong investment, but the investment needs to be understood clearly. So one of the major things that changed after July 1st, 2026, was the elimination of Graduate PLUS loans. For the past 20 years, the Graduate PLUS loan program, often called Grad PLUS, has been an important federal loan option for graduate and professional students. Grad PLUS loans allowed eligible students to borrow up to the full cost of attendance minus other financial aid received. For many students, that flexibility helped cover gaps between standard federal unsubsidized loans and the actual cost of graduate school.

Dr. Christopher Lewis [00:04:41]:
Grad PLUS loans also came with federal loan features, including fixed interest rates, income-driven repayment eligibility, deferment options, and potential eligibility for public service loan forgiveness, depending on employment and repayment plan. For students in high-cost graduate or professional programs, Grad PLUS was often the bridge between available federal unsubsidized loans and the full cost of completing the degree. But beginning July 1st, 2026, that bridge is no longer available to new borrowers. So that is a significant change because without Grad PLUS, you may need to rely more heavily on institutional aid, assistantships, fellowships, employer tuition benefits, savings, income from work, payment plans, Or even private loans. And not all of those options are equally available to you. This doesn't mean that graduate school is out of reach, but it does mean that you're going to need to understand your financial plan earlier and in more detail. And you need to do that before you commit to a program. So before committing to a program, you need to be able to ask some additional questions like, will federal loans cover the cost of the program? And if not, What kind of options are available to you? Does your program offer scholarships, fellowships, or assistantships? Do you have employer tuition support that could be available to you, or, or are you going to need private loans? And if you do need private loans, what are the risks and the repayment terms that you need to understand? The end of Grad PLUS Loans means that you cannot assume that federal borrowing will automatically cover the cost of attendance.

Dr. Christopher Lewis [00:06:26]:
Also, after July 1st, 2026, New borrowing limits have also been put in place. These limits include annual borrowing limits, aggregate limits, and an overall federal lifetime cap. For graduate students in nonprofessional degree programs, the annual federal loan limit will now be $20,500 per year with an aggregate graduate borrowing limit of $100,000. And if you are a student in a professional degree program, the annual limit is expected to be $50,000 a year with an aggregate limit of $200,000. There's also an overall federal lifetime borrowing cap of $257,500, which includes federal loans borrowed across undergraduate, graduate, and professional study. That lifetime cap is especially important. Why? Because graduate students don't start from zero if they already borrowed as undergraduates. If you borrowed federal loans in your bachelor's degree, those loans may now count toward your lifetime federal borrowing limit.

Dr. Christopher Lewis [00:07:32]:
That means that if you have less remaining federal eligibility for graduate school, that you— that means that you may have less remaining federal eligibility for graduate school than you initially expected. So before enrolling in graduate programs, you need to know what your current federal loan balance is and understand how much eligibility that you still have available to you. Another important piece of the new borrowing structure is the distinction between graduate program— graduate degree programs and professional degree programs. This matters because students in professional degree programs may qualify for higher federal borrowing limits. With the new structure, students in eligible professional degree programs, as I mentioned, may have access to the higher annual limit of $50,000 a year, or that $200,000 Aggregate. By contrast, the other graduate students in nonprofessional programs are limited to the $20,500 per year and $100,000 in aggregate. According to the guidance provided, professional degree programs may include fields such as law, medicine, osteopathic medicine, dentistry, veterinary medicine, optometry, podiatry, pharmacy, chiropractic, theology, and clinical psychology. But here's the thing.

Dr. Christopher Lewis [00:08:53]:
Even since July 1st, 2026, there have been lawsuits that have gone to the courts that may change the definition of what a professional program is. So as I said earlier about staying up to date, you're going to have to continue to ask questions and to look further into whether your program is truly considered a professional program or a nonprofessional program as relates to your specific institution. And the only way to do that is to have a conversation with your financial aid office. So while this is still in flux, it is very important to know because depending on what type of program that you're going into and whether it is considered a professional or nonprofessional degree will ultimately impact the amount of money that you can take out every year. Another change is that in the new borrowing environment, you need full cost projections before you enroll. With all of these changes that have been put into place, you need to know the full cost of the program that you're interested in before you enroll. You need to know more than just the tuition for your first semester, more than just the tuition for your first year, or you instead need to know the full projected cost of completing The degree, and that includes your tuition, your fees, books, supplies, housing, food, transportation, health insurance, clinical and internship expenses, licensure costs, and any other program-specific costs that might be out there. But this also includes time.

Dr. Christopher Lewis [00:10:31]:
How much time does it typically take to finish a degree? Because if a program is listed as a 2-year degree, but students usually take longer than that, that's going to impact you financially. An extra semester, or a year can mean additional tuition fees, living expenses, etc. So before enrolling, you need to ask your institutions to provide you with that information. You need to get that better, fuller picture of the full cost projection for the program so that you can make informed decisions about ultimately what you're going to do in the end about this program and whether it's the right program for you. You see, one of the things that you might find is that a program that looks expensive upfront may cost more if it takes longer to complete, and a program with higher tuition may be more affordable if it offers strong institutional aid, a shorter timeline, or better career outcomes. The number you want is not just sticker price. The number you want is the net cost over the full program. Another thing that you really need to be thinking about in this new type of environment is that you need to be able to borrow only what you need.

Dr. Christopher Lewis [00:11:48]:
That may sound obvious, but it becomes even more important when annual and lifetime loan limits apply. Under stricter borrowing limits, every dollar matters. If you borrow more than necessary in one year, That borrowed amount may reduce the federal loan eligibility you have available later to you, even if you pay some of it back. So that means that you need to think strategically before accepting the full amount of the loan that's being offered to you. You've got to be able to ask yourself, do you really need all of this money? Can you reduce your expenses? Can you cover some costs through Income, savings, or employer support? Are there scholarships or assistantships that you might not have explored? And could a payment plan help you avoid borrowing as much upfront? All of these type of questions are going to help you to be able to make smart decisions because the goal is to borrow enough to support your success, but not more than you need. As you look at your program, you may find that federal loans don't cover the full cost of your program. And if that happens, don't immediately jump to the private private loans without exploring other options. First, start with your financial aid office.

Dr. Christopher Lewis [00:13:05]:
You want to ask whether there are institutional scholarships, emergency grants, graduate assistantships, fellowships, tuition discounts, payment plans, or other forms of support that could be offered to you as an individual. You can talk to the program as well and ask whether students commonly work part-time, whether there are paid internships that are available, whether assistantships are open to students in your degree. And whether there are department-level awards. You can also talk to your employer if you're working, because some employers do offer tuition opportunities or educational benefits that you might not be aware of. You can ask whether tuition reimbursement or tuition assistance through your employer is available, and because in some cases those benefits are available and they may even be tax-free. Up to a certain amount. Ultimately, with all of this, there's no single right answer. The point is to evaluate your options before committing to debt.

Dr. Christopher Lewis [00:14:06]:
I also want to make sure that you think about private loans. Private loans may be part of the financing, uh, may be part of the financing plan for some of you. Private loans may be part of the financing plan that you need to consider, but they should be. And if you are going to do that, you need to make sure that you're approaching them carefully. Private loans are not the same as federal loans. May have variable interest rates. They could require a credit check. They could require a cosigner.

Dr. Christopher Lewis [00:14:35]:
They may have fewer repayment protections. Because they may have fewer repayment protections, they may not offer income-driven repayment, and they're generally not eligible for public service loan forgiveness. So before taking out a private loan, you need to make sure that you're asking the lender good questions. About what, what is the interest rate? Is it fixed? Is it variable? If they're offering you a current rate, if and when does that potentially change? Are there origination fees? When does repayment begin? Does the interest accrue, or does the interest accrue while you're enrolled? Is there a cosigner required? Are there penalties for early repayment? What happens if you lose it? What happens if you lose your job or face financial difficulty? These are all really important questions to ask. And if you're considering private loans, you need to make sure that you're comparing lenders carefully and make sure that you understand the repayment terms before signing. So what does all this mean when you're choosing a graduate program? It means affordability and outcomes need to be part of the decision from the beginning. Of course, you should still consider academic quality, faculty expertise, curriculum, location, format, accreditation. Research opportunities, clinical training, and professional fit.

Dr. Christopher Lewis [00:15:54]:
Those things matter. But you should also ask, what is the total cost of completing this degree? How much aid is available? Is funding guaranteed? Will federal loans cover the full cost? And if not, what is the gap? Are you going to need a private loan? And how much debt do graduates in this program typically have? What are the typical starting salaries? What percentage of graduates work in their intended field? How long does it take for graduates to repay their loans? And how does this program help students achieve career outcomes? A strong program should be willing to help you understand those questions. If you can't get clear answers, that's information too. Graduate school is not only about whether a program wants you, it's also about the program. It's also whether the program is a good fit for your goals, your finances, And your future. So if you're considering graduate school after July 1st, 2026, let me give you a couple of things to consider. First, review your current federal loan balance. Know how much you've borrowed as an undergraduate and how much lifetime eligibility you may still have remaining.

Dr. Christopher Lewis [00:17:04]:
Second, ask each program for a full cost projection. Don't rely on tuition. Ask for the total estimated cost to complete the degree. Third, confirm your program classification. Find out whether the program is considered a graduate degree program or a professional degree program for federal loan purposes. Fourth, ask about funding. Find out about scholarships, fellowships, assistantships, tuition waivers, employer partnerships, and payment plans that can all impact the amount that you have to pay. Fifth, estimate your borrowing need.

Dr. Christopher Lewis [00:17:42]:
You need to look at how much you may need to be able to borrow each year and in total. Sixth, evaluate repayment. Look at the salary data and the loan repayment estimates to understand what life after graduation may look like financially. Seventh, be cautious with private loans because if private loans are necessary, you need to compare terms carefully and understand what protections you do or don't have. And finally, you need to stay informed because federal lending rules and institutional policies can be complex and constantly changing. Ultimately, graduate school can still be a powerful and worthwhile investment. I am the biggest advocate for that and biggest advocate for you to continue that education to move toward your goals. Now that we have passed July 1st, 2026, you do need to approach graduate financing with even more care.

Dr. Christopher Lewis [00:18:42]:
The elimination of Grad PLUS loans, new annual and aggregate borrowing limits, and the federal lifetime loan cap all make early financial planning essential. The good news is that you don't have to navigate this alone. As you're looking at schools, as you're deciding on the school to go to, talk to financial aid officers, talk to your graduate program staff, talk to admission representatives, Talk to current students and alumni and ask for data, ask for projections, and ask for written funding details. And remember, asking financial questions does not make you difficult. It makes you prepared. The goal is not simply to enroll in graduate school. The goal is to choose a program that you can complete, afford, and use to move confidently toward your professional and personal goals. That's all for today's episode of Victors in Grad School.

Dr. Christopher Lewis [00:19:36]:
Thanks for listening. And keep asking good questions, keep planning ahead, and moving toward the future. The University of Michigan-Flint has a full array of master's and doctorate programs if you are interested in continuing your education. Whether you're looking for in-person or online learning options, the University of Michigan-Flint has programs that will meet your needs. For more information on any of our graduate programs, visit umflint.edu/grad. graduate programs to find out more. Thanks again for spending time with me as you prepare to be a Victor in grad school. I look forward to speaking with you again soon as we embark together on your graduate school journey.

Dr. Christopher Lewis [00:20:18]:
If you have any questions or want to reach out, email me at flintgradoffice@umflint.edu.