In July 2025, new federal legislation was passed that impacts federal financial aid. Most changes will be implemented on July 1, 2026, which is the beginning of the 2026-2027 academic year. To ensure students remain abreast of changes, this website will be updated regularly with new announcements, changes, and resources as it pertains to the impact of this legislation. Medical Student Financial Services will also distribute routine communications through other channels as well (This Week, Money Matters newsletters, etc.).
The changes highlighted below will be implemented beginning July 1, 2026, which is the beginning of the 2026-2027 academic year.
If you have questions, don’t hesitate to contact Medical Student Financial Services at medschoolscholarship@uab.edu, 205.934.2332, or schedule an appointment.
Changes to the Direct Unsubsidized Loan
- New annual limit: Students will be eligible to borrow up to $50,000 per academic year.
- New aggregate and lifetime limits:
- Aggregate Limit – Students can borrow a maximum of $200,000 during medical school. Please note, this limit includes any direct unsubsidized loans borrowed during another graduate program.
- Overall Lifetime Limit – Students can borrow a maximum of $257,500 in federal student loans, including Direct Subsidized and Unsubsidized loans. This includes loans from undergraduate and other graduate programs along with your medical school loans.
- Exceptions for Current Borrowers (“Legacy Provisions”): Students who borrow a Direct Unsubsidized loan before July 1, 2026, while enrolled in a credentialed program, can continue to borrow under pre-legislative loan limits for three additional academic years or until program completion, whichever is less.
Discontinuation of the Graduate PLUS Loan Program
- The Graduate PLUS Loan Program will be discontinued beginning July 1, 2026.
- Exceptions for Current Borrowers (“Legacy Provisions”): Students who borrow a Federal Direct Student Loan (Direct Unsubsidized or Graduate PLUS Loan) before July 1, 2026, while enrolled in a credentialed program, can apply for Graduate PLUS Loan funds for an additional three academic years or until program completion, whichever is less.
Combined Federal Loan Limits
The tables below provide a comparison of federal loan options available before and after the legislative changes.
Summary of Changes to Federal Loan Limits – Annual Limits
| Direct Unsubsidized Loan | Graduate Plus Loan | Total | |
|---|---|---|---|
| 2025-2026 Academic Year | $44,944 for MS1 and MS4 $47,167 for MS 2 and MS3 |
Up to max cost of attendance | Up to max cost of attendance |
| Beginning with 2026-2027 Academic Year | $50,000 | Not available | $50,000 |
Summary of Changes to Federal Loan Limits – Aggregate and Lifetime Limits
| Aggregate Graduate-Level Limit Includes direct unsubsidized loans for medical school or any other graduate studies | Lifetime Limit Includes direct subsidized and unsubsidized loans for undergraduate and graduate studies | |
|---|---|---|
| Prior to July 1, 2026 | Not applicable | $224,000 |
| Beginning July 1, 2026 | $200,000 | $257,500 |
New Loan Repayment Plans
- New Standard Repayment Plan: This plan has a fixed number of years of repayment: 10, 15, 20, or 25 years, based on the outstanding principal balance.
- Income-Based Repayment Assistance Plan (RAP): This plan has a monthly payment based on a percentage of your Adjusted Gross Income (AGI), from 1-10%. There is a $10 minimum monthly payment. The repayment period is 30 years. Additional benefits include no interest accumulation on unpaid amounts, and if your payment does not reduce the principal, you are eligible for a $50/month reduction in your balance.
- Exceptions for Current Borrowers/Legacy Provisions: Borrowers with no new loans made on or after July 1, 2026, are eligible to enroll in the current Standard, Graduated, Extended, or current Income Based plans. Borrowers enrolled in ICR, PAYE, or SAVE plans have until July 1, 2028, to transition to a new repayment plan, or they will be automatically moved into RAP.
- MedLoans Organizer and Calculator (MLOC): The AAMC is currently updating their MLOC program to reflect the new loan repayment options. This should be available in the spring to allow you to enter your loan information and compare loan repayment options across plans.
Resources
Federal Student Aid Legislative Updates
AAMC Webinar: Navigating Student Loans and Repayment Changes Post Budget Reconciliation
Last updated Oct. 17, 2025
The information on this webpage is being maintained as a courtesy and is subject to change without notice. The Federal Student Aid website serves as the primary resource for all information related to federal financial aid.