Grandfathered into Grad PLUS? What current students keep

Who qualifies

The Education Department calls it the “interim exception.” Aid offices often say “legacy” or “grandfathered.” You qualify if both of these are true (FSA loan limits FAQ):

1. You were enrolled in your dental program as of June 30, 2026.
2. You received a Direct Loan for that program before July 1, 2026.

A few details from FSA’s FAQ that trip people up:

• Any Direct Loan counts. It can be Direct Unsubsidized or Grad PLUS. You don’t need to have taken Grad PLUS before.
• It had to be disbursed. A loan you or the school canceled doesn’t count. There’s no minimum amount.
• It doesn’t have to be recent. If you borrowed for the program in 2024–25 but not 2025–26, you still qualify.
• You didn’t need to be registered for fall. Being a degree-seeking student in good standing on June 30, 2026 is enough.

Who doesn’t qualify: students who start dental school after June 30, 2026. Neither do students who hadn’t taken a Direct Loan for the program by then. Loans for a prior graduate program don’t count, per the ADEA. The ADEA expects the Class of 2030 and later to need private loans for any shortfall.

What you keep

While the exception lasts, you borrow under the pre-July 2026 rules:

	Grandfathered students	New borrowers
Grad PLUS	Up to cost of attendance minus other aid	Not available
Direct Unsubsidized, per year	Old health professions limit: $40,500 for a 9-month dental year, up to $47,167 for 12 months	$50,000
$200,000 aggregate and $257,500 lifetime caps	Don’t apply during the exception (the old $224,000 Unsubsidized aggregate does)	Apply

The FSA FAQ confirms grandfathered health professions students keep the higher old Unsubsidized limits. The dollar amounts are from the FSA Handbook.

You can’t opt out to get the new $50,000 limit instead (FSA FAQ). You can always borrow less than you’re offered.

How long it lasts

The exception runs for the lesser of three academic years or the time left in your program. FSA calls this your “expected time to credential.” It’s measured against your program’s published length and the part you’d finished before July 1, 2026.

For a four-year DDS or DMD program:

Class	Year in 2026–27	Time left on July 1, 2026	Covered through graduation?
2027	D4	1 year	Yes
2028	D3	2 years	Yes
2029	D2	3 years	Yes, the full three years
2030	D1	Started after June 30, 2026	No; new limits apply

The ADEA puts it this way: current dental borrowers can use Grad PLUS until July 1, 2029.

If your program runs longer than four years, or you have more than three years left, the exception ends after three academic years. The rest is under the new limits.

When it ends, every federal loan you’ve taken counts toward the $257,500 lifetime cap, including Grad PLUS borrowed during the exception (FSA FAQ). If you’re already past $257,500, you’d have no federal loan eligibility left for the remaining time.

Extra time doesn’t extend it. In FSA’s example, a part-time student entering a fifth year of a four-year program had no exception left. If you repeat a year, plan for that year to fall under the new limits.

What ends it early

These end the exception, per FSA and NASFAA:

• Withdrawing. If you withdraw for any reason, or stop being enrolled, you lose it.
• A break in enrollment. FSA’s example: skipping the fall and spring terms after July 1, 2026 counts as a break.
• Changing programs. Moving to a different program ends it for the first program. A new program you start after June 30, 2026 doesn’t get it either.
• Transferring schools. NASFAA says you must stay enrolled in the same program at the same institution. FSA defines a graduate “program of study” by the school’s ID, program code and credential level. So a transfer means a new program.

These don’t end it:

• An approved leave of absence. You keep the exception if you return to the same program within 180 days. The leave doesn’t count against your three years.
• Dropping a course. Eligibility depends on being enrolled, not on your credit load.
• A required research year. FSA says the exception holds if the year is a required part of the program and you don’t withdraw.
• Your school merging or closing. FSA says a merger or change of ownership keeps it, and so does moving to a teach-out school in the same program after a closure.

Going part-time doesn’t end it, but it can shrink your loans. Starting in 2026–27, schools must reduce loans for less-than-full-time enrollment, including for grandfathered students.

The cost of Grad PLUS

Keeping Grad PLUS is useful, but it isn’t cheap. For loans first disbursed in 2026–27:

Loan	Rate	Origination fee
Direct Unsubsidized (graduate/professional)	8.07% fixed	1.057%
Grad PLUS	9.07% fixed	4.228%

The math on $30,000 of Grad PLUS for one year:

• Fee: $30,000 × 4.228% = about $1,270, vs about $320 on the same amount of Unsubsidized.
• Interest: $30,000 × 9.07% = about $2,720 a year, vs about $2,420 at 8.07%.

So take your full Direct Unsubsidized amount first. Use Grad PLUS for what’s left.

Grad PLUS or a private loan?

Grad PLUS is federal. It keeps the Repayment Assistance Plan, Public Service Loan Forgiveness, and federal deferment and forbearance. A private loan doesn’t.

As of September 2026, the lowest advertised private fixed rates were below 9.07%; see the dated rate table on the private loans page. Those lowest rates go to borrowers with the strongest credit or a strong cosigner. Don’t compare on rate alone. The fee, the protections, and what happens to a cosigner all count. If PSLF is a real possibility for you, such as the military or an FQHC, Grad PLUS is usually the safer choice.

Compare both on the same terms. See private student loans for dental school, compared.

What to do each year

1. Confirm your status with the aid office. The Education Department’s system flags eligible students for schools. Ask the office to confirm you’re flagged and how many years you have left.
2. Accept Direct Unsubsidized first. Take your full Unsubsidized amount before Grad PLUS. It’s cheaper on both rate and fee.
3. Borrow Grad PLUS only for the gap. Your cost of attendance is a ceiling, not a target.
4. Talk to the aid office before any change. That includes a leave, part-time enrollment, a dual degree, a transfer, or a withdrawal.
5. Plan for the year it ends. If you’ll need a year beyond the exception, that year runs on the new limits. Price it with the dental school funding gap tool.
6. Know your total. Track your balance and monthly interest. See dental school debt: the real numbers and federal loan limits for dental students.