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Examining the Impact of New Federal Student Loan Limit Regulations

ByBlake Decker

The passage of the One Big Beautiful Bill Act (OBBBA) by the US Congress in July 2025 introduced a number of sweeping changes affecting colleges and universities in the United States. One of the primary components of the OBBBA was an overhaul of federal student loan borrowing limits for graduate students. Codified as the Reimagining and Improving Student Education (RISE) Rule, the RISE Rule was published on May 1, 2026 and takes effect on July 1, 2026.

Central to the new regulations are revised caps for new student borrowers in graduate and professional programs, as well as limits for Parent PLUS borrowers who take out federal loans on behalf of dependent undergraduate students (RISE Rule Fact Sheet). For the purpose of this summer blog post series, we will initially concentrate on the more broadly impactful changes in the RISE Rule, specifically the adjustments to annual loan limits for new student loan borrowers in graduate ($20,500) and professional ($50,000) programs. Note: A list of new regulations and the definition of professional programs can be found at the end of this blog post, including an interim exemption for existing loan borrowers.

Share of Loan Borrowers Above New Limits: State-by-State Data

Using data published by the US Department of Education’s Office of the Chief Economist, the Postsecondary Education & Economics Research (PEER) Center created estimates for more than 58,000 graduate and professional academic programs across more than 2,200 institutions that received federal Title IV funding. The emphasis on “estimates” is due, in part, to suppression in the OCE data related to small sample sizes. Thus, the following data should be treated as “informative” rather than “definitive.”

Using the loan caps outlined above as cut points, the PEER Center calculated the number and percentage of students who acquired federal loans in excess of the new loan limits, as well as determined the volume of loan amounts that were in excess of the new limits.

  • Across all institution types (Public, Private Nonprofit, and Private For-Profit) and credential levels (Graduate Certificates, Master’s, Doctoral, and Professional degrees), the PEER Center’s estimated data showed a national annual average of 29 percent (367,518 out of 1,266,247) of borrowers who would have been affected by the new loan limits.
  • PEER Center’s estimates also showed that more than one-quarter (25.2%, or $8.7B out of $34.4B) of annual loan volume disbursed were above the new loan limits.
  • In the grid map below, we can see differential effects based on state affiliation of borrowers. Five states (Oregon, California, New York, Nevada, and Vermont, plus Washington, D.C.) had at least 40 percent of graduate students who borrowed above the new RISE Rule loan limits across graduate and professional degree programs. New Hampshire (6.7%) and Delaware (7%) were the only states with less than one-tenth of borrowers affected by the new loan limits according to the PEER Center’s estimated data.
  • In Texas, across all institutions included in the PEER Center estimates, almost 19% of all borrowers and 14% of all loan volume would have been affected by the new loan limits. These values place Texas 13th overall when compared to the other states in terms of both borrowers and loan volume impact under the new RISE Rule caps.

Share of Loan Borrowers Above New Limits: Credential-Level Data

The second visualization above shows that the percentage of loan borrowers affected by the new loan limits also differs based on a combination of credential level and institutional control.

  • Across all credential levels (Overall), almost 36% of all borrowers at Private Nonprofit institutions would be affected by the new loan limits.
    • Hovering over this data point shows that Private Nonprofit institutions had more than $5.7 billion in loan volume that would be affected by the new loan limits. This means that Private Nonprofit institutions were responsible for 65.6% of the $8.7 billion of total loan volume estimated to be impacted in the PEER Center’s data.
    • New York University (76% of borrowers, $259.4 million loan volume) and University of Southern California (70% of borrowers, $247.9 million loan volume) were the top two Private Nonprofit institutions in terms of loan volume affected by the new loan limits.
  • By comparison, Public institutions had just under 24% of borrowers in graduate and professional programs affected by the new loan limits, while the $2.1 billion in affected loan volume accounted for approximately 24% of total loan volume affected.
    • The three Public institutions with the highest loan volume affected were the University of Washington – Seattle (53.6% of borrowers, $55.2 million loan volume), University of Illinois Chicago (51.9% of borrowers, $52.8 million loan volume), and University of Michigan (46% of borrowers, $48.4 million loan volume).
    • Across Texas public institutions, the University of Texas at Austin (42.3% of borrowers, $22.6 million loan volume), Texas Tech University Health Sciences Center (32.3% of borrowers, $10.5 million loan volume), and Texas A&M University (18.2% of borrowers, $9.3 million loan volume) were the Public institutions in Texas with the highest loan volume affected under the new loan limits.
  • Professional programs (see note below for designations) at Private Nonprofit (54.7%) and For-Profit (66.4%) institutions see the highest percentages of loan borrowers above the new annual limit of $50,000 in federal loans for students in Professional programs. Across all institution types, almost one-half (48.5%) of all borrowers in Professional programs would be affected by the new loan limits, although Public institutions had less than 38% of borrowers affected.

So What?

Understandably, the information above is a lot to digest, especially given the relative newness of finalized regulations. However, these data points represent just the tip of the iceberg in terms of initial estimates published by the PEER Center. Subsequent blog posts in this series will dive into more detailed data, including exploring the effects of new graduate and professional program loan limits based on variables such as mission-specific institution type and programs of study within different credential levels.

RISE Rule Definitions

As stated on pages 2-3 of the RISE Rule Fact Sheet:

Beginning on or after July 1, 2026:

  • Graduate student loans are capped annually at $20,500, with an aggregate cap of $100,000;
  • Professional student loans are capped annually at $50,000, with an aggregate cap of $200,000;
  • For the first time, Parent PLUS borrowers are capped annually at $20,000, with an aggregate cap of $65,000 per dependent;
  • All borrowers who receive a loan made on or after July 1, 2026, are subject to an aggregate lifetime loan limit of $257,500, with narrow exceptions discussed below;
    • Grad PLUS loans that a borrower has received will be included in this new aggregate lifetime limit, unless the borrower qualifies for the interim exception discussed below, in which case they will continue to be subject to the former (preAct) limits during the interim exception period; and
    • Parent PLUS loans made to a borrower for their dependent students are excluded
      from a borrower’s lifetime limit.

Interim exception: for borrowers enrolled in a program before July 1, 2026, and who have already received a loan for that program, an interim exception to the new loan caps will apply. Under this exception, borrowers may continue borrowing under the prior (pre-Act) annual, aggregate, and lifetime loan limits for the lesser of three years or their expected time to credential (defined as the period determined by subtracting from the program length the portion of the program the borrower has already completed), provided that they remain continuously enrolled. If a borrower ceases enrollment or withdraws from the program, they will no longer qualify for the interim exception and will instead be subject to the new annual, aggregate, and lifetime loan limits.

Professional Student Definition: The definition includes a list of 11 core program fields: pharmacy (Pharm.D.), dentistry (D.D.S. or D.M.D.), veterinary medicine (D.V.M.), chiropractic (D.C. or D.C.M.), law (L.L.B. or J.D.), medicine (M.D.), optometry (O.D.), osteopathic medicine (D.O.), podiatry (D.P.M., D.P., or Pod.D.), theology (M.Div., or M.H.L.), and clinical psychology (Psy.D. or Ph.D.). Nearly all of these fields have long been classified as professional degrees under the Department’s existing regulations, and no program has lost its professional degree classification under the final rule.