Three Key Takeaways
- Grad PLUS ends: New graduate borrowers face lower federal borrowing limits.
- HBCUs are vulnerable: Low-income and first-generation students have fewer options to fill financing gaps.
- FAMU faces pressure: Pharmacy and other professional students could turn to private loans or additional aid.
Financial aid offices at FAMU and other historically Black colleges and universities have spent the opening weeks of the fall semester helping families navigate a federal student-loan system that has fundamentally changed how much they can borrow.
The changes stem from the One Big Beautiful Bill Act, signed into law on July 4, 2025, with most student-loan provisions taking effect for new periods of enrollment beginning July 1, 2026.
At the center of the changes is the elimination of Grad PLUS loans for new borrowers. Under the previous system, graduate and professional students could use Grad PLUS to borrow up to the full cost of attendance after exhausting their regular federal Direct Loan eligibility.
That option is now gone.
Most graduate students are limited to $20,500 a year and $100,000 in aggregate unsubsidized Direct Loans. Students in designated professional programs, including medicine, law, pharmacy and dentistry, may borrow up to $50,000 annually and $200,000 in total.
The law also establishes a new $257,500 lifetime federal Direct Loan ceiling covering undergraduate and graduate borrowing. Parent PLUS loans are excluded from that cap.
For HBCUs, the implications are particularly significant.
Many HBCUs enroll a larger share of first-generation and low-income Black students than their predominantly white institutions counterparts. Families with fewer financial resources have historically relied more heavily on federal borrowing to cover the difference between financial aid and the actual cost of attending college.
The new limits could widen that difference.
Parent PLUS loans, another important financing tool for HBCU families, are now capped for new borrowers at $20,000 a year and $65,000 in aggregate per dependent student.
The concern echoes what happened after federal changes to Parent PLUS eligibility in 2011-12, when HBCUs experienced sharper enrollment declines as more families lost access to the loans they had expected to use to finance college.
At FAMU, the issue extends into graduate and professional education.
The university is a major producer of Black graduates in pharmacy, business, engineering and the sciences. Its College of Pharmacy and Pharmaceutical Sciences is among the programs where the new federal limits could have an especially visible effect.
Students who previously could use Grad PLUS to cover their remaining educational expenses after reaching the standard Direct Loan limit must now find another source of money.
Financial aid officials have been working through revised financial-aid packages, determining which students qualify for the new legacy protections and directing students and families toward other sources of assistance when federal loans fall short.
“The limits are clear in the statute and the final rule, but translating them into individual student budgets is labor-intensive, and the gaps are real for many families,” said a financial aid professional familiar with operations at public HBCUs who was not authorized to speak on the record.
The professional-degree borrowing limits provide some relief. But even a $50,000 annual federal borrowing ceiling may not cover the full cost of some professional programs once tuition, housing, food, transportation and other expenses are included.
That leaves students with a difficult menu of alternatives: scholarships, institutional aid, work-study, additional employment, private loans or, in some cases, reconsidering whether they can afford to enroll.
Private lenders are expected to absorb some of the graduate borrowing that previously flowed through Grad PLUS. Estimates from the American Enterprise Institute have put the annual amount at roughly $8 billion.
But private loans can be more difficult for students from low-income families to obtain. They may require stronger credit histories or a creditworthy co-signer and generally do not provide the same repayment protections available through the federal system.
That distinction is particularly important for HBCU students, for whom access to credit can be as consequential as the price of tuition.
The new system does contain a limited transition provision.
Students who were continuously enrolled in the same program and received a Direct Loan for that program before July 1, 2026, can remain under the previous rules for up to three academic years or the remainder of their expected time to degree, whichever is shorter.
New borrowers receive no such protection.
The borrowing changes also coincide with a restructuring of federal repayment options. New borrowers generally will have access to a tiered standard repayment plan or the new Repayment Assistance Plan, which bases payments on adjusted gross income and provides forgiveness after 30 years.
Older income-driven repayment plans are being phased out for many borrowers under transition rules extending through 2028.
For HBCUs, the larger question is what happens when the new federal borrowing limits collide with the cost of professional education.
HBCUs have long served as engines of economic mobility, producing generations of Black doctors, lawyers, pharmacists, engineers, educators and other professionals.
If students cannot finance those degrees through federal loans, the alternatives could shape who enters those professions.
Universities can increase institutional aid, seek philanthropic support, expand emergency assistance and adjust financial-aid counseling. But those resources are limited.
FAMU and its HBCU peers, the immediate challenge is therefore straightforward but consequential: how to keep students enrolled when the federal government has lowered the amount they can borrow without necessarily lowering the cost of the education they are trying to obtain.
The effects, whether through reduced enrollment, increased private borrowing or greater pressure on university financial-aid budgets, may become clearer as the 2026-27 academic year unfolds.