Student loans in 2026 work differently than they did even a year ago. A new federal law (OBBBA) capped Parent PLUS loans, ended Grad PLUS loans for new borrowers, replaced the SAVE repayment plan with a new one called RAP, and raised interest rates for the 2026-27 school year. This guide is your map: what you can borrow, what it costs, how you'll pay it back, and how to borrow only what you truly need.
Borrowing for college is one of the most stressful financial decisions a family makes, and the rules just got more complicated. We'll keep this in plain language, point you to the primary sources, and link to deeper guides for each step. The goal is simple: help you make a borrowing decision you can live with after graduation, not just get through the next tuition bill.
What changed for student loans in 2026?
The biggest shift is the One Big Beautiful Bill Act (OBBBA), with most rules taking effect July 1, 2026. In short: Parent PLUS borrowing is now capped, Grad PLUS loans end for new borrowers, the SAVE repayment plan is gone, a new Repayment Assistance Plan (RAP) launches, and federal interest rates rose for 2026-27. If you are borrowing for fall 2026, these rules apply to you.
These are the headline changes, confirmed by the U.S. Department of Education and summarized at Federal Student Aid:
- Parent PLUS loans are capped at $20,000 per year and $65,000 lifetime per dependent student.
- Grad PLUS loans end for new borrowers on July 1, 2026 (current students may be grandfathered for up to three years).
- The SAVE plan is terminated, replaced by RAP for new borrowers.
- Interest rates rose for loans first disbursed on or after July 1, 2026.
For the full breakdown, see our guide to the final OBBBA student loan rules.
How much can you borrow in 2026?
Federal loans have firm annual and lifetime limits, and OBBBA tightened several of them. Dependent undergraduates can borrow $5,500 as a freshman, $6,500 as a sophomore, and $7,500 in later years. Parents can add Parent PLUS up to the new $20,000-a-year cap. Graduate and professional students now face new limits because Grad PLUS is ending.
Here is the quick reference for 2026-27:
- Dependent undergraduates: $5,500 (year 1), $6,500 (year 2), $7,500 (years 3+).
- Parent PLUS: up to $20,000/year, $65,000 lifetime per dependent student.
- Graduate students: up to $20,500/year in Direct Unsubsidized loans ($100,000 lifetime).
- Professional students (med, law, etc.): up to $50,000/year ($200,000 lifetime).
- Less-than-full-time enrollment means your loan amount is prorated.
For history and detail, see federal student loan limits by year, Parent PLUS loans in 2026, and borrowing for graduate school.
Federal or private loans: which should you use first?
Rankings
Compare private student loan options
Compare College Ave, Earnest, and Sallie Mae — with Sallie's rate matched to this program where available.
- Rank #1Editor's Pick
Undergrad
College Ave
Best for: Students who want flexible repayment options and no origination fees
- 0.25% rate reduction with auto-pay
- Four in-school repayment options
- No application, origination, or prepayment fees
- Borrow from $1,000 up to 100% of cost of attendance
Apply NowRates
Lowest Rate 1.94%
1.94% - 17.99% fixed APR, 3.89% - 17.99% variable APR
Disclosures+
College Ave's student loan products are made available through Firstrust Bank, member FDIC, First Citizens Community Bank, member FDIC, or BTG Pactual Bank, N.A., member FDIC. All loans are subject to individual approval and adherence to underwriting guidelines. Program restrictions, other terms, and conditions apply. (1) All rates include the auto-pay discount. The 0.25% auto-pay interest rate reduction applies as long as a valid bank account is designated for required monthly payments. If a payment is returned, you will lose this benefit. Variable rates may increase after consummation. (2) As certified by your school and less any other financial aid you might receive. Minimum $1,000. (3) This informational repayment example uses typical loan terms for a freshman borrower who selects the Deferred Repayment Option with a 10-year repayment term, has a $10,000 loan that is disbursed in one disbursement and a 8.35% fixed Annual Percentage Rate (APR): 120 monthly payments of $179.18 while in the repayment period, for a total amount of payments of $21,501.54. Loans will never have a full principal and interest monthly payment of less than $50. Your actual rates and repayment terms may vary. Information advertised valid as of 8/18/2026. Variable interest rates may increase after consummation. Approved interest rate will depend on creditworthiness of the applicant(s), lowest advertised rates only available to the most creditworthy applicants and require selection of the Flat Repayment Option with the shortest available loan term.
- Rank #2
Undergrad
Sallie Mae
Best for: Undergraduate and graduate students, and parents, comparing competitive fixed- and variable-rate private student loans
- Competitive variable and fixed rates
- Multiple repayment options
- Cosigner release available
- No origination fees
Apply NowRates
Lowest Rate 1.95%
1.95% - 17.49% fixed APR, 3.75% - 16.95% variable APR
Disclosures+
Undergraduate School Loan/Smart Option Student Loan: Examples of typical transactions for a $10,000 Smart Option Student Loan with the most common fixed rate, Fixed Repayment Option, two disbursements, a 4-year in-school period, and a 6-month grace: For a borrower with the shortest loan term, it works out to 16.16% fixed APR, 51 payments of $25.00, 119 payments of $296.32 and one payment of $41.82, for a total loan cost of $36,578.90. For a borrower with the longest loan term, it works out to 16.38% fixed APR, 51 payments of $25.00, 177 payments of $265.54 and one payment of $173.00, for a total loan cost of $48,448.58. Loans that are subject to a $50 minimum principal and interest payment amount may receive a loan term that is less than 10 years. A variable APR may increase over the life of the loan. A fixed APR will not. Information advertised valid as of 08/25/2026. Rates: Advertised APRs for undergraduate students assume a $10,000 loan with a 4-year in-school period, a 6-month grace, and the longest loan term offered. Interest rates for variable rate loans may increase or decrease over the life of the loan based on changes to the 30-day Average Secured Overnight Financing Rate (SOFR) rounded up to the nearest one-eighth of one percent. Advertised variable rates are the starting range of rates and may vary outside of that range over the life of the loan. Interest is charged starting when funds are sent to the school. With the Fixed and Deferred Repayment Options, the interest rate is higher than with the Interest Repayment Option and Unpaid Interest is added to the loan's Current Principal at the end of the grace/separation period. To receive a 0.25 percentage point interest rate discount, the borrower or cosigner must enroll in auto debit through Sallie Mae. The discount applies only during active repayment for as long as the Current Amount Due or Designated Amount is successfully withdrawn from the authorized bank account each month. It may be suspended during forbearance or deferment. Cosigner Release: Only the borrower may apply for cosigner release. To do so, they must first meet the age of majority in their state and provide proof of graduation (or completion of certification program), income, and U.S. citizenship or permanent residency (if their status has changed since they applied). In the last 12 months, the borrower can't have been past due on any loans serviced by Sallie Mae for 30 or more days or enrolled in any hardship forbearances or modified repayment programs. In addition, the borrower must have paid ahead or made 12 on-time principal and interest payments on each loan requested for release. The loan can't be past due when the cosigner release application is processed. The borrower must also demonstrate the ability to assume full responsibility of the loan(s) individually and pass a credit review when the cosigner release application is processed that demonstrates a satisfactory credit history including but not limited to no: bankruptcy, foreclosure, student loan(s) in default or 90-day delinquencies in the last 24 months. Requirements are subject to change.
- Rank #3
Undergrad
Earnest
Best for: Borrowers who want a zero-fee¹ lender with flexible repayment options² across undergrad, grad, and professional school programs
- 0.25% Auto Pay³ discount plus 0.25% Loyalty⁴ discount for eligible returning borrowers
- No origination fees, late fees, or prepayment penalties¹
- Borrow $1,000⁵ to $400,000 with 5, 7, 10, 12, or 15-year terms⁶
- Four repayment options², a 9-month grace period⁷, and cosigner release for eligible borrowers⁸
Check EligibilityRates
Lowest Rate 2.29%
2.29% - 16.24% fixed APR, 4.74% - 16.60% variable APR
Disclosures+
Earnest Private Student Loans are subject to credit approval. ¹Earnest does not charge fees for origination, late payments, returned check, or prepayments. Florida Stamp Tax: For Florida residents, Florida documentary stamp tax is required by law, calculated as $0.35 for each $100 (or portion thereof) of the principal loan amount, the amount of which is provided in the Final Disclosure. Lender will add the stamp tax to the principal loan amount. The full amount will be paid directly to the Florida Department of Revenue. Certificate of Registration No. 78-8016373916-1. ²Repayment terms and repayment options available vary based on loan type. ³You can take advantage of the Auto Pay interest rate reduction by setting up and maintaining active and automatic ACH withdrawal of your loan payment from a checking or savings account. The interest rate reduction for Auto Pay will be available only while your loan is enrolled in Auto Pay. Interest rate incentives for utilizing Auto Pay may not be combined with certain private student loan repayment programs that also offer an interest rate reduction. It is important to note that the 0.25% Auto Pay discount is not available when loan payments are deferred during the interim period as a result of selecting the deferred repayment option. ⁴To be eligible for the Loyalty Discount, applicants must have previously obtained an Earnest Private Student Loan and apply using the same email address associated with that loan. Only one Loyalty Discount may be applied per eligible Earnest Private Student Loan. Not all applicants may qualify. This offer cannot be combined with Earnest’s Rate Match program. Earnest may modify or discontinue this offer at any time and without notice, however, once a Loyalty Discount is earned, it will not be taken away. ⁵Residents of Hawaii must request a loan of at least $1,501. ⁶Available interest rates are subject to change. Interest rates as of 03/19/2026. Earnest’s Loan Cost Examples: 1.) These examples provide estimates based on principal and interest payments beginning immediately upon loan disbursement. Variable annual percentage rate ("APR"): A $10,000 loan with a 15-year term (180 monthly payments of $152.84) and a 16.85% interest rate without Auto Pay (16.85% APR) would result in a total estimated payment amount of $27,511.20. For a variable loan, after your starting rate is set, your rate will then vary with the market. Fixed APR: A $10,000 loan with a 15-year term (180 monthly payments of $150.30) and a 16.49% interest rate without Auto Pay (16.49% APR) would result in a total estimated payment amount of $27,054.10. 2.) These examples provide estimates based on interest-only payments while in school. Variable interest rate: A $10,000 loan with a 15-year term (180 monthly payments of $152.84) and a 16.85% interest rate without Auto Pay (16.85% APR) would result in a total estimated payment amount of $35,515.14. For a variable loan, after your starting rate is set, your rate will then vary with the market. Your actual repayment terms may vary. Other repayment options are available. The calculation assumes that the “in-school” period is 4 years (48 months) and includes our 9 month grace period, during which the monthly payment will be $140.42 for 57 months. Fixed interest rate: A $10,000 loan with a 15-year term (180 monthly payments of $150.30) and a 16.49% interest rate without Auto Pay (16.49% APR) would result in a total estimated payment amount of $34,886.94. Your actual repayment terms may vary. Other repayment options are available. The calculation assumes that the “in-school” period is 4 years (48 months) and includes our 9 month grace period, during which the monthly payment will be $137.42 for 57 months. 3.) These examples provide estimates based on fixed $25 payments while in school. Variable interest rate: A $10,000 loan with a 15-year term (180 monthly payments of $253.39) and a 16.85% interest rate without Auto Pay (14.92% APR) would result in a total estimated payment amount of $47,035.20. For a variable loan, after your starting rate is set, your rate will then vary with the market. Fixed interest rate: A $10,000 loan with a 15-year term (180 monthly payments of $246.61) and a 16.49% interest rate without Auto Pay (14.65% APR) would result in a total estimated payment amount of $45,814.80. Your actual repayment terms may vary. Other repayment options are available. The calculation assumes that the “in-school” period is 4 years (48 months) and includes our 9 month grace period, during which the monthly payment will be $25.00. 4.) These examples provide estimates based on deferred payments. Variable interest rate: A $10,000 loan with a 15-year term (180 monthly payments of $275.17) and a 16.85% interest rate without Auto Pay (14.67% APR) would result in a total estimated payment amount of $49,530.60. For a variable loan, after your starting rate is set, your rate will then vary with the market. Fixed interest rate: A $10,000 loan with a 15-year term (180 monthly payments of $268.03) and a 16.49% interest rate without Auto Pay (14.39% APR) would result in a total estimated payment amount of $48,245.40. Your actual repayment terms may vary. Other repayment options are available. It is important to note that the 0.25% Auto Pay discount is not available when the deferred repayment option has been selected and the loan is in the interim period. The calculation assumes that the “in-school” period is 4 years (48 months) and includes our 9 month grace period, during which the monthly payment will be $0. ⁷Nine-month grace period is not available for borrowers who choose our Principal and Interest Repayment plan while in school. ⁸To qualify for automatic cosigner release, the outstanding principal balance of your loan must be paid down to 50% or less of the original principal balance. The primary borrower must have made 36 months of required payments after the end of the Interim Period. The primary borrower must meet our eligibility and minimum credit requirements. Additional terms and conditions may apply. To request cosigner release, the primary borrower must have made 12 consecutive, monthly on-time principal and interest payments (or an amount equal thereto) immediately preceding the cosigner release application. The primary borrower must satisfy certain eligibility and credit criteria at the time of application. Additional terms and conditions may apply. ⁹Includes 0.50% combined Auto Pay and Loyalty discounts. Actual rate and available repayment terms will vary based on your financial profile. Fixed annual percentage rates (APR) range from 2.79% to 16.74% (2.29% - 16.24% with Auto Pay and Loyalty discounts). Variable annual percentage rates (APR) range from 5.24% to 17.1% (4.74% - 16.6% with Auto Pay and Loyalty discounts). Earnest variable interest rate student loans are based on a publicly available index, the 30-day Average Secured Overnight Financing Rate (SOFR) published by the Federal Reserve Bank of New York. The variable rate is based on the rate published on the 25th day, or the next business day, of the preceding calendar month, rounded to the nearest hundredth of a percent plus a margin and will change on the 1st of each month. The rate will not increase more than once a month, but there is no limit on the amount that the rate could increase at one time. Our lowest rates are only available for our most credit qualified existing cosigned loan borrowers who receive the 0.25% Loyalty discount and requires selection of our shortest term offered, full principal and interest payment while in school, and enrollment in our 0.25% Auto Pay discount. Enrolling in Auto Pay is not required as a condition for approval. Interest rates are subject to change. Earnest Private Student Loans are made by FinWise Bank, Member FDIC. FinWise Bank, 756 East Winchester, Suite 100, Murray, UT 84107. Earnest student loans are serviced by Earnest Operations LLC, 300 Frank H. Ogawa Plaza, Suite 340, Oakland, CA 94612. NMLS #1204917, with support from Higher Education Loan Authority of the State of Missouri (MOHELA) (NMLS# 1442770). FinWise Bank and Earnest LLC and its subsidiaries, including Earnest Operations LLC, are not sponsored by agencies of the United States of America. © 2026 Earnest LLC. All rights reserved.
Use federal loans first, almost always. Federal student loans offer fixed rates, income-driven repayment, and forgiveness options that private loans do not. Private loans can fill a gap after you've maxed federal aid, but they depend on credit, often need a cosigner, and lack federal protections. Borrow federal up to your limit before considering private.
A few things to weigh before signing a private loan:
- Cosigner: most students need one; understand what cosigning a student loan really means for the cosigner.
- Rate type: fixed vs. variable changes your risk over time.
- Protections: private loans rarely offer income-driven plans or forgiveness.
Our full comparison, federal vs. private student loans, walks through how to decide.
How much should you actually borrow?
Borrow the least you can, and let your expected salary set the ceiling. A widely used rule of thumb: keep your total student debt at or below your expected first-year salary. If you'll likely start around $50,000, total borrowing of $50,000 or less is usually manageable; $100,000 would be a heavy weight. The limit you can borrow is rarely the amount you should.
It helps to picture the monthly reality before you sign. As a rough guide, every $10,000 borrowed costs about $100 a month on a standard 10-year plan. See what that does to a real post-graduation budget of rent, food, and transportation. Our guides on how much to borrow based on your expected salary and what borrowing $10,000 really means after graduation make this concrete.
What will a student loan cost in 2026-27?
Federal rates rose for the 2026-27 school year and are fixed for the life of the loan. For loans first disbursed on or after July 1, 2026, the rate is 6.52% for undergraduate Direct loans, 8.07% for graduate Direct loans, and 9.07% for PLUS loans. Private loan rates vary widely by credit, roughly 5% to 17%.
Two cost traps worth understanding early: interest can build while you're still in school (on unsubsidized loans), and unpaid interest can be added to your balance, a process called capitalization. Learn how interest capitalization works and read why your 2026-27 rate is locked in at 6.52% and what it means for your plan.
How will you repay your loans?
Repayment changed in 2026 too. New federal borrowers will generally choose between a new tiered Standard plan and the Repayment Assistance Plan (RAP), which bases payments on income (1% to 10% of adjusted gross income) with forgiveness after up to 30 years. The SAVE plan has ended, though IBR, PAYE, and ICR remain for those still eligible. Your first payment is usually due after a grace period following graduation.
Start here to understand your options:
- Student loan repayment in 2026: what new borrowers need to know
- The new tiered Standard repayment plan
- Income-driven repayment plans compared
- The SAVE plan is ending: what to do now
- Student loan grace periods after graduation
Can your student loans be forgiven?
Sometimes, through specific programs, but never count on broad cancellation. Public Service Loan Forgiveness (PSLF) can erase remaining federal debt after 10 years of qualifying payments in government or nonprofit work. Teachers, nurses, and some state residents have their own programs. These rules shifted in 2026, so confirm current details before you rely on them.
Explore the main paths:
- Public Service Loan Forgiveness (PSLF) explained for 2026
- Teacher loan forgiveness: up to $17,500
- Nurse and healthcare worker forgiveness programs
- State-based loan forgiveness programs
How to borrow wisely: a step-by-step checklist
The safest borrowing follows a clear order: free money first, federal loans next, private loans only as a last resort, and never more than you need. Always file the FAFSA, accept grants and scholarships, then borrow the minimum federal amount that covers your real gap.
A simple sequence:
- File the FAFSA to unlock grants, work-study, and federal loans.
- Subtract all free money (grants and scholarships) from your cost to find your true gap.
- Borrow federal loans up to your limit before any private loan.
- Complete entrance counseling and the Master Promissory Note to activate federal loans.
- Build a repayment plan before graduation so the first bill is no surprise.
- Know the consequences of defaulting on student loans so you can avoid it.
When you're ready to see your real numbers across schools and figure out how much you actually need to borrow, create your free CollegeLens plan.
Your next step
Understanding the rules is half the battle; the other half is borrowing only what fits your future. Use federal loans first, keep total debt at or below your expected starting salary, and run the numbers before you sign. Start by filing the FAFSA, then create your free CollegeLens plan to see your real gap and a borrowing amount you can actually repay.
You're doing the hard, smart work of understanding the cost before you commit. That's exactly how families avoid borrowing regret.
Sravani at CollegeLens
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