The road to a graduate degree in America may look very different from now on. This is because legislation passed in July 2025 ended the Grad PLUS loan program. Prospective graduate students who plan to start a graduate program on or after July 1, 2026, will no longer have those loans as an option if they need financial assistance to pay for education costs that federal student loans can’t cover.
It’s hard to overstate the impact of Grad PLUS loan changes on graduate students, because those loans were what made access to graduate school possible for so many. After all, graduate school programs can be costly, often far exceeding the amount you can borrow through federal loans. As a result, students turned to Graduate PLUS Loans to help them make up the difference.
Now, those same students may find themselves struggling to figure out how to pay for grad school without Grad PLUS Loans. Fortunately, there still are pathways to advanced degrees at institutions like American College of Education (ACE), where there’s a focus on maintaining the affordability of valuable graduate degree programs that many working professionals need to unlock more career opportunities.
Let’s dive further into the changes to Grad PLUS Loans, what it means for prospective students, what graduate student loan options are in 2026 and how institutions like ACE are making it possible for students to pursue further education without further student debt.
What Are Grad PLUS Loans?
Grad PLUS Loans are student loans offered by the United States Department of Education to help graduate and professional students cover the cost of grad school after other types of financial aid have been used, like scholarships, Pell Grants or unsubsidized loans. They can help pay for things like tuition, fees, textbooks and living expenses.
While Grad PLUS Loans are federal student loans, they differ from other federal loans in a few key ways:
- A basic credit check is required to determine eligibility. While the check is not based on income or credit score, prospective borrowers cannot have an adverse credit history.
- There is no borrowing cap.
- Typically, they have a higher fixed interest rate than other federal loans.
- They are not subsidized, which means interest starts to accrue the moment the loan is disbursed.
The fact that Grad PLUS Loans have no borrowing cap is significant, as that’s what allows some graduate students to fund their education in full. Other federal loan options have annual and lifetime limits on how much you can borrow, and those limits often fall short of graduate degree costs.
But they also come with downsides, like their high interest rates and immediate interest accrual. Of course, their biggest downside is the heavy debt burden they place on their borrowers.
Why Are Grad PLUS Loans Being Eliminated?
In July 2025, the One Big Beautiful Bill Act was signed into law, setting into motion the elimination of the Grad PLUS loan program. This change is part of the U.S. government’s initiative to move away from federal lending and prioritize using taxpayer subsidies on undergraduate education and workforce training.
There’s no question that federal student loan debt is a big problem, with millions of Americans already shouldering the burden of over $1.6 million in federal student loans. Eliminating a source of uncapped lending potential like Grad PLUS Loans – and potentially reevaluating similar programs like Parent PLUS Loans for undergraduate students – could help control not just student debt levels but also rising tuition costs.
Indeed, a working paper from the National Bureau of Economic Research found that Grad PLUS Loans had a sizable impact on program costs, with net tuition increasing by 64 cents for every dollar of federal funding per student. Much like with Title IV loans, higher education institutions felt enabled to increase the price of their programs because they knew students could borrow enough to cover the cost.
This mentality leaves students literally and figuratively paying the price. They have to take on increasing amounts of debt to access career opportunities that have not proportionally increased in salary outlook or financial benefits. That means the return on their educational investment shrinks every time tuition prices go up.
Moving forward, there will be a $100,000 lifetime cap on federal graduate student borrowing or $200,000 for professional school borrowing. And while mandating a cap may cause colleges and universities to rethink future price hikes, it also may not. That’s because they know many students leverage private student loans to finance their education from the likes of Sallie Mae, Ascent, SoFi and more.
So, what is the solution here? What does higher education need to truly control student debt levels and rising tuition costs?
The ACE Difference: Why We’ve Never Used Federal Loans
What about a higher education institution that’s never accepted federal financial aid programs of any kind, and that was purposefully built that way from its inception?
ACE was founded with a mission to provide affordable, accessible education that could help working professionals move their careers forward. In order to do this, we made a distinctive decision within higher ed – though we were eligible, ACE would not accept Title IV loans.
This decision has allowed us to keep our tuition low. We don’t have the administrative and operational costs required to implement and operate these federal aid programs, and we pass those savings on to our students. Furthermore, we practice careful financial responsibility and sustainability, knowing that we do not and will not rely on the cushion that student loan money could provide.
Instead, ACE offers flexible payment plans and actively works to create workforce partnerships that make full use of employer reimbursement benefits. Combined with graduate program prices that are among the lowest in the industry, these efforts have allowed our students to not just avoid going into thousands of dollars of student debt but for 86% of them to graduate with no debt.*
How ACE Supports Graduate Students Without Federal Loans
Let’s take a closer look at how ACE puts graduate degrees within reach of working professionals even without federal student loans.
First and foremost, we are completely transparent on our program costs, listing full tuition and fee information right on each program’s page. There’s nothing more frustrating for a student trying to research prospective programs than struggling to find pricing information, which many higher education institutions either bury deep within their website directory or force students to calculate out themselves. Program cost is one of the most important pieces of information students need to make a well-informed decision about their graduate program, so we make it easy to find.
ACE also actively works to find as many ways as possible for students to save money on their program. We award over $1.2 million in scholarships and grants every year. Many of the grants we offer are part of employer tuition assistance partnerships that we have with thousands of school districts, hospital systems, professional organizations, corporations and more. Through these partnerships, we provide continuing education opportunities at a reduced tuition rate to develop employees’ skills and knowledge, preparing them for the next step in their careers.
Finally, ACE offers a variety of flexible payment options to allow our students to pay for their program at a cadence that aligns with their financial needs. Due to our low cost, some of our students are able to pay out of pocket, either in full or by course. We’ve also partnered with private financial lenders to create plans that offer students several repayment options, such as monthly payment plans with no interest. Bottom line: We work with our students to ensure they can access the continuing education they need to achieve the careers they want.
What This Means for Prospective Students
Higher education today is expensive, and it will probably be a while before that changes. The removal of resources like Grad PLUS Loans will make it harder for some prospective students to afford graduate school.
Fortunately, there are institutions like ACE that are working to provide affordable, accessible graduate degrees without relying on federal student loans. They are keeping costs low to limit student borrowing from the outset, creating pathways to advanced education that are within reach.
If you’re a prospective graduate student wondering how to move forward given all these changes to federal borrowing, consider speaking with the financial aid officers at the schools you’re considering to explore their recommended alternative funding options. We also encourage you to explore what ACE has to offer. Between our low-cost tuition, high-quality coursework and financial support options, we believe you’ll find a path forward in your career through one of our graduate programs.
Conclusion
In an effort to curtail student debt and rising higher education tuition, the federal government is phasing out Grad PLUS Loans, which will make it difficult for many to pursue graduate degrees. Students can’t afford to wait for colleges and universities to figure out how to make their programs more affordable, especially when tuition only seems to increase year over academic year. They need certifications to be able to work or ways to advance their career right now.
ACE is here for those students with our commitment to affordable, debt-conscious education. We’ve helped over 40,000 graduates complete the continuing education they need to get ahead, without incurring extra student debt that would hold them back.
Learn more about ACE’s fully online graduate degree programs by exploring our program finder or connecting with an Enrollment Counselor by emailing [email protected].
*Internal research completed in March 2025
