A new bill proposed by the GOP aims to cap graduate student loans and overhaul federal borrowing systems. If signed into law by President Trump, the measure could reshape how students finance advanced degrees, potentially exacerbating existing educational inequalities.
Starting in July 2026, the bill would restrict federal borrowing for graduate and professional students, including those pursuing law and medical degrees. This change has sparked widespread debate, with critics arguing that it could disproportionately harm low-income and marginalized communities.
Key Provisions of the Loan Cap
One of the most significant aspects of the bill is the cap on federal loans for graduate students. Under the new guidelines, graduate students would be able to borrow up to $20,500 annually, with a lifetime cap of $100,000.
Professional students, including those in law and medical schools, could borrow up to $50,000 per year, with a maximum of $200,000 in total loans. These caps replace the current federal Grad PLUS loan program, which allows students to borrow up to the full cost of attendance.
Critics, however, fear that these limits are insufficient to cover the costs of many graduate and professional programs, particularly in fields that are already underfunded or in high demand, such as healthcare.
According to the Center for American Progress, these new restrictions could exacerbate the shortage of medical professionals, particularly in rural areas. The bill’s critics argue that without access to adequate federal loans, students may have no choice but to turn to private lenders, which typically offer less favorable terms and higher interest rates.
Repercussions on Education and Career Prospects
The proposed loan caps could have a long-term impact on students’ decisions to pursue graduate education. For many, taking on debt to further their education is a necessary step to secure higher-paying jobs in specialized fields.
However, with limited federal borrowing options, some students may find themselves unable to afford an advanced degree, potentially forgoing postgraduate study altogether. This could lead to a widening skills gap in industries that rely heavily on highly educated professionals.
The bill also sets a $65,000 cap on Parent PLUS loans, which are unsubsidized loans offered for parents aiming to support dependent undergraduate students. These loans will also no longer be eligible for repayment programs.
This change could have significant consequences for families looking to finance their children’s education, especially as the cost of higher education continues to rise.
Repaying student debt is expected to shift dramatically, as the bill guts loan forgiveness programs that have been in place for years and alters payment requirements that previously benefited disadvantaged lower-income families.
The bill provides only two repayment plans: a standard repayment plan that allows borrowers to repay over 10 to 25 years based on their loan amounts, regardless of income, and a “Repayment Assistance Plan” (RAP) based on borrowers paying monthly payments between 1% and 10% of their discretionary income. This new approach could lead to higher payments for many borrowers.
The bill’s potential consequences are compounded by the fact that the U.S. Department of Education reports 42.5 million borrowers with outstanding federal student loan debt as of the second quarter of 2025.
White House Press Secretary Karoline Leavitt announced Thursday that President Trump is scheduled to sign the “big, beautiful bill” on Friday at 5 p.m. EST, sealing its fate and setting the stage for significant changes to student loan systems across the country.
