U.S. — The Trump administration plans to cap graduate school loans for many students at $20,500 annually and $100,000 overall, effective July 1, 2026. The administration also plans to end the Grad PLUS program on the same date.

The U.S. Education Department confirmed that these new limits will begin on July 1, 2026. For the past two decades, graduate students have been able to take out an unlimited amount of federal student loans to cover the full cost of their education through programs like Grad PLUS.

U.S. Secretary of Education Linda McMahon stated in May that the goal of the loan limits is to encourage colleges to lower tuition prices. "College costs are just exorbitant. Students are burdened with debt... We really have to do something to bring down the cost of college," McMahon said.

Republicans used the One Big Beautiful Bill Act to implement these changes. The cost of graduate school has increased in recent years, with Robert Kelchen, a professor of higher education at the University of Tennessee, Knoxville, noting that nearly half of student borrowing is among graduate students, despite their smaller population share. "We're at a point where almost half of the borrowing right now is among graduate students, despite them being a much smaller share of the overall population," Kelchen said.

Researchers studying the impact of the Grad PLUS program in Texas found that for every additional dollar students received, graduate schools increased their prices by $0.64 after accounting for grants. Jeff Denning, an economist and professor at the University of Texas at Austin, was part of this research team. "Having essentially uncapped loans, I think, is not a great policy," Denning said.

Kelchen indicated he did not find evidence of a direct connection between federal aid and prices in his research on business, medical, and law schools. "I did not find evidence of a direct connection between federal aid and prices," he said. He further explained that medical school is costly for institutions to operate. "It can take a million dollars of resources to produce one medical degree. So limiting borrowing is not going to reduce that cost," Kelchen said.

Sandy Baum, a senior fellow at the Urban Institute, observed a broad consensus regarding the previous unlimited loan policy for graduate students. "I think there was broad consensus that the idea of letting graduate students borrow basically infinite amounts of money was not a good idea," Baum said. A federal court temporarily blocked a small piece of the Trump administration's plan related to these loan caps.