The Impact of New Student Loan Restrictions on Graduate and Professional Education
Charlie Rollin, a rising junior at St. Olaf College, is rethinking his plans to attend veterinary school due to new restrictions on student loan borrowing introduced by a recent legislative change. These changes are part of a broader tax package that has significant implications for students pursuing advanced degrees.
The bill introduces two major modifications to federal student loans: it sets new caps on direct federal loans and eliminates the Graduate PLUS loan program. This means students can no longer borrow their full cost of attendance without proving financial need. For many, this makes certain schools financially unattainable.
“Madison (Wis.) is no longer an option,” Rollin said. “And that sucks, because what if they had said yes? I mean, I literally cannot go.”
These changes have far-reaching consequences. Students in high-cost professional programs like law or medicine may now find themselves unable to pursue these careers without family wealth or access to private loans. The new limits could also lead to fewer students enrolling in advanced degree programs, particularly those from lower-income backgrounds, rural areas, students of color, and first-generation college attendees.
Justin Monk, director of student and institutional aid policy at the National Association of Independent Colleges and Universities (NAICU), emphasized that higher education has become significantly more expensive as a result of these changes.
Financial Implications for Students
The new loan caps will affect graduate and professional students differently. For example, graduate students will face a lifetime borrowing limit of $20,500 each year for federal unsubsidized loans and a lifetime cap of $100,000. For professional students, including those in law and medical schools, the annual cap is $50,000, with a lifetime limit of $200,000.
The elimination of Grad PLUS loans removes a critical resource for many students who rely on them to cover expenses beyond the limits of direct borrowing. These loans, while carrying a higher interest rate, allow students to cover room and board, transportation, and even childcare. However, students opting for private loans may face challenges such as credit score requirements, higher interest rates, and less flexible repayment options.
“It’s going to be a windfall” for private loan providers, Monk said.
Challenges for Students and Institutions
Many students are now considering alternative strategies to manage their education costs. Some are looking into schools that offer in-state tuition or scholarships, while others are exploring military programs that cover medical school tuition. Others are contemplating taking time off before attending school or working in sectors with better pay to offset future debt.
For instance, Norah Langager, a rising senior at St. Olaf College, is considering adding an extra gap year before starting law school. Meanwhile, Isam Hussaini, a rising senior at Macalester College, remains determined to pursue medical school regardless of the changes.
Institutions may also feel the impact of these changes. Smaller, private colleges and universities may struggle to maintain enrollment in graduate programs, potentially leading to closures. Rural institutions, which often rely heavily on tuition revenue, could be especially affected.
Long-Term Effects on Workforce and Education
The long-term effects of these changes could reshape the landscape of higher education and the workforce. Programs that serve low-income students may be phased out, and there may be a shift toward attracting wealthier students to sustain financial viability.
At Mitchell Hamline School of Law, Nick Anderson noted that the changes could reduce the number of public defenders, civil rights advocates, and diverse voices in legal settings. Similarly, the University of Minnesota reported over 2,500 students using Grad PLUS loans in 2025, highlighting the potential impact on the state's future workforce.
Richard Painter, a law professor at the U, suggested that some students might now opt for more affordable law schools, such as the University of Minnesota, which offers a total cost of attendance between $83,000 and $93,000. This shift could fundamentally alter the economics of law schools.
As students and institutions adapt to these changes, the long-term implications for access to higher education and professional careers remain uncertain. While some see potential shifts in educational pathways, others worry about the loss of diversity and accessibility in key fields.