Minnesota Launches State Grad Loan for 2026

If you were counting on federal Grad PLUS loans to fund graduate or professional school, you're now two weeks away from losing that option. Grad PLUS loans end for new borrowers on July 1, 2026, and most states haven't moved to fill the gap.

Minnesota has. The state's Office of Higher Education launched the SELF Grad Loan program this month, according to Inside Higher Ed (June 17, 2026) — one of the first state-administered programs built explicitly in response to the federal cuts.

What the SELF Grad Loan Is

The SELF Grad Loan is a fixed-rate loan administered by the Minnesota Office of Higher Education for graduate students enrolled at eligible Minnesota schools. What makes it different from a private student loan: your interest rate is not based on your credit score.

Instead, the rate depends on two things — whether you have a co-signer on the loan, and which repayment term you choose. As of June 2, 2026, rates are:¹

Repayment Term	With Co-Signer	Without Co-Signer
10 years	6.00%	7.25%
15 years	6.45%	7.75%
20 years	6.95%	7.95%

The credit-score-neutral structure matters for grad students who are early in their careers and have thin credit files. Many private lenders price graduate loans based primarily on credit history, which can push rates for new borrowers significantly higher.

Borrowing Limits

After July 1, federal unsubsidized loans cap at $20,500 per year for most graduate students, with a $100,000 lifetime limit. The SELF Grad Loan is designed to cover costs beyond that ceiling.

Students in health profession programs — medicine, dentistry, advanced dentistry, pharmacy, and veterinary medicine — can borrow up to $300,000 total through the SELF Grad program, with no annual cap.¹ That's a significant difference from the $200,000 lifetime limit on federal professional student borrowing after July 1.

$300,000

For a realistic view of how much graduate debt is manageable relative to expected income, see our guide on how much student debt is too much and the data on average student loan debt by degree level.

Three Things Most Borrowers Won't Think to Ask

1. The co-signer is on the hook until the loan is paid off — not just until graduation.

The SELF Grad co-signer remains responsible for the full balance until the loan is completely repaid.¹ This isn't unusual in state loan programs, but it differs from some private lenders that offer co-signer release after 24 to 48 months of on-time payments. If you ask a parent or relative to co-sign, they need to understand this is a 10-, 15-, or 20-year commitment, not a short-term guarantee.

2. The rate is set at origination and fixed for the life of the loan.

Whatever rate applies when you first borrow is locked in. If rates rise in future semesters, borrowers who locked in during summer 2026 come out ahead. If you're enrolling in a multi-year program, it may be worth borrowing for multiple years at once if the program allows it.

3. This loan is only for students at Minnesota institutions.

The SELF Grad Loan is not portable. It's available to graduate students at schools within Minnesota — not to Minnesota residents enrolled out of state. Students outside Minnesota should check whether their own state has a comparable program, or compare private loan rates carefully. Our breakdown of federal vs. private student loans covers what to look for when private borrowing is your remaining option.

The 10-year SELF Grad rate with a co-signer (6.00%) is meaningfully lower than what most private lenders will offer a recent college graduate with limited credit history. If you have a creditworthy co-signer available and are confident in a 10-year payoff, this rate is worth comparing directly against any private offers you receive — don't assume private means higher.

Why This Program Matters Beyond Minnesota

Minnesota is notable here not just because it launched a new program, but because it moved before July 1. Most states have not yet created a replacement for Grad PLUS at the state level.

Graduate students who have relied on Grad PLUS will need to cover that gap through private loans, institutional scholarships, or employer tuition assistance. For students in Minnesota, the SELF Grad Loan provides a middle path — still a loan, still requiring repayment, but administered by a state agency and priced without a credit check.

The elimination of Grad PLUS and the new federal repayment landscape after July 1 have reshaped what graduate borrowing looks like. Review your repayment plan options after July 1 — the plan you pick for existing debt affects your monthly cash flow alongside any new borrowing you take on.

What to Do If You're a Minnesota Grad Student

1. Apply early. The SELF Grad program is accepting applications now. Rates are set as of June 2, and waiting may mean borrowing at a different rate.
2. Compare loan types. Run the SELF Grad rate against what your school's financial aid office quotes from private lenders. The difference may be smaller than expected — or larger.
3. Review your co-signer conversation. If you need a co-signer to access the lower rate, be specific with them about the timeline. They're on the loan until it's paid off, not until graduation.
4. Log in to StudentAid.gov. Verify your federal loan balance and check whether you have any Grad PLUS grandfathering — current grad students who borrowed any federal direct loan before July 1 may be eligible to continue Grad PLUS for up to three additional years.
5. Consider your program length. If you're in a medical, dental, or pharmacy program, the $300,000 lifetime SELF Grad cap may cover your full funding gap. Model out your total borrowing before year one begins. See our guide on getting into graduate school for a full picture of cost planning.

For comparison on college costs in Minnesota and what graduate programs actually cost at in-state institutions, see our Minnesota cost guide.

Footnotes

1. Inside Higher Ed. (2026, June 17). Minnesota Launches Graduate Student Loan Program. insidehighered.com. https://www.insidehighered.com/news/quick-takes/2026/06/17/minnesota-launches-graduate-student-loan-program ↩ ↩² ↩³

2. Minnesota Office of Higher Education. (2026). Current and Historic SELF Loan Interest Rates. selfloan.mn.gov. https://selfloan.mn.gov/selfloan/current-historic-self-loan-rates ↩