Who can afford grad school? New loan caps may narrow the field
New federal loan caps for graduate students will limit borrowing to $20,500 per year and $100,000 total for most programs, and $50,000 per year and $200,000 total for professional degrees like medicine and law. Students without strong credit may face barriers to advanced degrees due to these changes.
Starting July 1, new federal loan caps will limit graduate students' borrowing. Students in most graduate programs will be capped at $20,500 per year and $100,000 total, while those in professional degree programs like medicine and law will be capped at $50,000 per year and $200,000 total. Jordan Matsudaira, a professor at American University, notes that these limits are 'very limiting' and will affect around 30% of students who rely on federal loans. Many affected students have thin or bad credit, making it difficult for them to access private loans. As a result, some students may be shut out of expensive programs like medical and law school. Institutions and states are trying to find alternative solutions to provide credit to these students.
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