What MBA Applicants Need To Know About Federal Aid in 2026

With new federal legislation taking effect July 1, 2026, prospective students may be seeing headlines about student loan limits and the elimination of the Graduate PLUS loan. If you’re considering an MBA, it’s natural to wonder what this means for you.

We spoke with Bethany Denton, director of student financial services at Rice Business, to break it down. The good news for prospective Rice MBA students is that these changes are manageable and, in many ways, already familiar to our community.

What’s Changed?

The Graduate PLUS Loan Is Ending for New Borrowers

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Beginning July 1, 2026, the federal Graduate PLUS loan will no longer be available to new borrowers.

There is a legacy provision: Current students who already borrowed a Graduate PLUS loan before July 1, 2026, and are continuing in the same program, may be able to borrow for up to three additional academic years (or the remainder of their program, whichever comes first).

For students starting their MBA after July 1, the PLUS loan will not be an option.

Federal Unsubsidized Loans Remain

The Federal Direct Unsubsidized Loan is not going away. The annual borrowing limits have not changed for Rice MBA students, and remain:

• $20,500 per academic year for students in the Full-Time MBA, Professional-Evening MBA, Hybrid MBA, Online MBA and Master of Accounting programs.
• $10,250 per academic year for students in the Executive MBA and Professional-Weekend MBA programs.

Prospective students planning to enroll part-time in the Online MBA may receive eligibility for prorated federal loans.

Though unsubsidized loan borrowing limits haven’t changed, we encourage all future Owls to plan intentionally across a variety of funding sources no matter which Rice MBA program you pursue.

What This Means for Rice MBAs

So, what does this really mean if you’re applying to an MBA program at Rice Business?

First, your primary federal option will be the Graduate Unsubsidized Loan, with the limit depending on your MBA program format. Second, you’ll want to think holistically about your funding plan — which is something our student financial services advisors already encourage students to do.

Most importantly: These changes don’t fundamentally alter how most Rice MBA students finance their degree.

Private Loans & Alternative Funding

Many Rice MBA students have been choosing private educational loans for years, even when the Graduate PLUS loan was available. In fact, we currently have more private loan borrowers than federal loan borrowers.

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Why? In recent years, federal PLUS loan interest rates were above 8–9% and included origination fees over 4%. Students with strong credit often found more competitive options through private lenders, some even hovering around 2–3%.

While some schools may be adjusting to the elimination of PLUS loans, prospective Rice Business students can rest easy knowing our team is prepared to help you navigate private options.

What Makes Private Loans Different?

Federal loans are standardized. Private loans are more flexible. They give students more control over:

• Fixed or variable rates
• When repayment begins (immediate, interest-only, flat or deferred)
• Repayment terms (5, 10, 15, etc.)
• Whether to apply with a co-signer

When selecting a lender, there are many things to consider, including graduation and performance-based bonuses. For example, some lenders offer a small interest rate discount or cash back if a student maintains a certain GPA, while another lender may offer a principal reduction or cash bonus for graduating.

You may also choose a loan for safety net features, like: forbearance policy, grace periods, and death and disability discharge. Many lenders allow you to preview your rate based on estimates and repayment decisions before you lock in with a credit check.

Prospective students can refer to Rice Business’ historical list of lenders commonly used by Rice MBA students. As a reminder, you are not limited to this list or obligated to borrow from any specific lender.

It’s less about replacing federal aid — and more about building a funding strategy that fits your goals and financial profile.

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Employer Sponsorship & Tuition Reimbursement

If you’re planning to stay with your employer during your MBA, we strongly recommend exploring tuition assistance. Many employers are open to supporting professional development — especially when it aligns with long-term growth.

Here are some tips to guide a conversation with your employer. Once you come to an agreement, be sure to clarify if tuition will be paid upfront or if you will be reimbursed after paying the school. That distinction matters when planning around billing deadlines.

Change in federal policy can feel unsettling, especially when you’re making a big investment in your future. But for prospective Rice MBA students, the 2026 financial aid updates are not cause for alarm.

The best part is, our Student Financial Services team works closely with Rice Business students throughout their MBA to help them build a funding plan that works best for them. Stay up-to-date with federal aid updates from Rice University and reach out to our team with any questions.
 

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