Graduate Direct Loan Updates

READ THIS CAREFULLY: Many students assume their graduate program qualifies for the higher professional limits when it does not.  Please review this list carefully and visit the Dept. of Education website for more infomation. 

What is the difference between a graduate student and a professional student?

• The term “graduate student” is defined as a student enrolled in a program of study that is above the baccalaureate level and that awards a graduate credential (other than a professional degree) upon completion of the program.
• The term “professional student” is defined as a student enrolled in a program of study that awards a professional degree upon completion of the program. A professional student may not receive federal student aid as an undergraduate student for the same period of enrollment.

What is a professional degree?
The term “professional degree” is defined as a degree that signifies

• completion of the academic requirements for beginning practice in a given profession and
• a level of professional skill beyond that normally required for a bachelor's degree.

A professional degree is generally at the doctoral level and requires at least six academic years of postsecondary education to complete, including at least two years of post-baccalaureate coursework, as well as generally requiring professional licensure to begin practice in the intended field.

**On June 24, 2026, the U.S. District Court for the District of Columbia preliminarily stayed part of the U.S. Department of Education’s professional degree definition. This means that some of the programs that were identified as a professional degree program won't be considered a professional degree program, while other programs that previously weren't identified as a professional degree program will be considered a professional degree program for the duration of the stay. We encourage you to contact your institution to determine if this impacts you.

Programs in bold below are those that NLU currently offers or plans to offer in the near future.

If you are unsure whether your NLU program qualifies for graduate or professional loan limits, contact Financial Aid. Borrowing under the wrong classification creates compliance issues and may require repayment.

Only Subsidized and Unsubsidized Loans borrowed as a graduate student count toward the $100,000 graduate aggregate limit. The following do NOT count:

• Loans borrowed for undergraduate study
• Grad PLUS Loans (these count toward the $257,500 lifetime maximum instead)

However, be aware that undergraduate loans DO count toward the $257,500 Lifetime Maximum Aggregate Loan Limit. Incoming graduate students with significant undergraduate debt should review their cumulative borrowing history at NSLDS before enrolling.

If your program is still considered a graduate program, then nothing has changed with your maximum annual Federal Direct Unsubsidized Loan. That figure remains $20,500. 

Effective July 1, 2026, the Federal Direct Unsubsidized Loan limits are different for graduate and professional students. Before this, the limits were the same.

 Graduate students

• May borrow no more than $20,500 in a Federal Direct Unsubsidized Loan during an award year. This is the current limit, so it is not a change.
• May not borrow more than $100,000 in Federal Direct Unsubsidized Loans during their graduate school career (excludes amounts borrowed as an undergraduate student). This is a new limit.

Professional students

• May borrow no more than $50,000 in a Federal Direct Unsubsidized Loan during an award year. This is a new limit.
• May not borrow more than $200,000 in Federal Direct Unsubsidized Loans during their graduate school career (includes borrowing as a graduate student and excludes amounts borrowed as an undergraduate student). This is a new limit. 

Graduate limits apply — not professional limits. Your annual cap is $20,500 in Unsubsidized loans, with a $100,000 graduate aggregate ceiling. Grad PLUS is not available to new borrowers. If you were enrolled in your NLU program before July 1, 2026, and received a prior loan disbursement, you may be a legacy student — see 'Am I considered a legacy student?' for details.

Yes. Even as a legacy student, the proration rule applies to your Direct Loans. While Grad PLUS eligibility is technically based on cost of attendance minus other aid (not a fixed annual cap), your total aid package — including loans — cannot exceed your cost of attendance. If you are enrolled part-time, your cost of attendance may be calculated differently, which could reduce your overall Grad PLUS eligibility. Contact Financial Aid to review your specific situation.

No. Your undergraduate loans do not reduce your $100,000 graduate aggregate ceiling — those are separate counters. However, your undergraduate loans do count toward the $257,500 lifetime maximum. So if you borrowed $40,000 as an undergraduate, you have $217,500 of lifetime borrowing capacity remaining (not $257,500).

Yes — unlike the $257,500 lifetime limit, the $100,000 graduate aggregate limit does reset as you repay loans. For example, if you reach $100,000 in graduate Unsubsidized loans but subsequently repay $30,000, you regain $30,000 in borrowing capacity under the graduate aggregate limit. The lifetime limit, however, never resets regardless of repayment.

If you re-enroll — whether at NLU or a different institution — you are a new borrower for that program and subject to the new loan limits: $20,500 annual Unsubsidized, $100,000 graduate aggregate, and the $257,500 lifetime maximum. Grad PLUS is not available. Contact Financial Aid to review how your prior borrowing affects your remaining eligibility before re-enrolling.

Beginning with the 2026–2027 award year, graduate students who enroll less than full-time will have their annual loan limit reduced proportionally. This is called the schedule of reductions, and it applies to ALL graduate students — including those who are grandfathered.

Example — Graduate student enrolling half-time:

• Full annual Unsubsidized limit: $20,500
• Half-time proration: approximately $10,250
• No Grad PLUS available (for new borrowers) to fill the gap

This is particularly significant for NLU's working adult graduate students who take one or two courses per term. The combination of lower annual caps and proration can create a meaningful funding gap compared to prior years.

BEFORE YOU DROP A COURSE: If you are considering reducing your credit load mid-semester, contact Financial Aid first. Dropping below full-time will reduce your next disbursement — not the one already received. An unexpected reduction in spring aid can create an account balance you were not planning for.