As of July 1, new caps will limit most graduate students to $20,500 a year in federal borrowing with a $100,000 lifetime ceiling; students pursuing professional degrees, including law and medical degrees, will face $50,000 annual limits and a $200,000 lifetime cap. The Grad PLUS program, which previously allowed students to borrow up to the full cost of attendance, is being eliminated.
The shift is likely to reshape who ultimately attends graduate school. Some students will still find ways to finance expensive degrees through family support or private lenders, but others may not have those options—especially Black and Hispanic borrowers. Black students are less likely to take out a private student loan compared with their White peers, but they are four times more likely to face distress in repayment, according to the Institute for College Access & Success.
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