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The federal student loan program is set to undergo massive changes following the July 4 passage of the One Big Beautiful Bill Act, leaving millions of prospective graduate and professional students in a state of panic.
Jonathan Lam, a 2024 graduate from the University of California, Los Angeles, had always dreamed of attending medical school. He graduated with a bachelor’s in molecular cell and developmental biology and was set to apply for medical school this cycle—that is, until the passage of the bill forced him to reconsider this goal.
“With these sudden changes to federal loans right when I’m about to matriculate, it’s pretty discouraging. I’ve been striving to reach med school for what feels like all my life, and to have everything I’ve worked for potentially jeopardized due to the Big Beautiful Bill is disheartening,” Lam said.
The bill will eliminate the Graduate PLUS loan program, which currently allows students to borrow up to the full cost of attendance for graduate or professional school. The bill will also impose new caps on federal student borrowing, limiting students to a lifetime maximum of $257,000. These changes to the PLUS program will take effect on July 1, 2026, meaning current students who have taken out at least one Grad PLUS loan for their program can continue borrowing under the present program for up to three more years. Those who plan on attending graduate or professional programs after that date, however, will be left with less favorable options: taking on private loans, adjusting their target schools, altering career goals, or abandoning graduate or professional school altogether.
The OBBBA will also phase out nearly all existing income-driven repayment plans in exchange for a single income-based repayment option—one that the administration says is simpler, but advocates say is less generous to borrowers—for people taking out new loans starting in July 2026. Crucially for students or recent grads who are contemplating graduate work that could land them jobs in public-service fields like education or social work, the Public Service Loan Forgiveness program is also at risk. While the OBBBA does not eliminate the PSLF, President Donald Trump has signaled through an executive order that its eligibility will become stricter.
Because I’m a rising junior in college, this bill hits close to home. Since the OBBBA passed, each choice I’ve made—from the classes I’ve picked for next semester to the groceries I buy—has pressed on an already anxiety-inducing sore: How will I possibly support myself if I attend graduate school?
With the impending overhaul of the current student loan system, I wanted to see how those impacted are, or are not, responding to the bill. I reached out to a number of students considering graduate or professional school, as well as experts on student loans, and their reactions were overwhelmingly uniform: The OBBBA is causing widespread distress over the future of financial accessibility in graduate and professional education.
“People are feeling anxious. There’s several of my friends who are grappling with multiple aspects of the OBBBA, like the fact that they might not be able to afford graduate school, [the] cap on loans, and subsidized loans are getting cut … this is a very common anxiety,” said Liv Johnson, a rising sophomore at Barnard College of Columbia University.
The new borrowing caps are top of mind for many of these students. The total borrowing amount for all graduate programs—those that confer degrees such as MAs, MBAs, and Ph.D.s—will be capped at $100,000, with an annual limit of $20,500. Borrowing amounts for all professional programs—such as medical, law, or dental school—will be capped at a total of $200,000, with an annual limit of $50,000.
While those numbers appear large, 2025 data from the Education Data Initiative reveals that the average total cost of law school that year was $217,480, and the average cost of tuition alone for the 2026–27 school year is projected to be $51,016. The picture is similar for medical schools; according to 2024 data, the average total cost of medical school is $238,420, with the annual average being $59,605.
“My concern there, for both master’s degree students and students planning to get a professional degree, is that they’re going to reach the cap before they complete [school]. And if that happens, their options are private loans. Private loans can be fraught with peril because they often have few or lower payment options or other safety nets,” said Betsy Mayotte, president and founder of the Institute of Student Loan Advisors.
In contrast to government-issued federal loans, private loans are made by lenders such as banks, credit unions, or schools, and they are generally more expensive than federal student loans. While private loans can be a viable option for some students, they notably do not offer forgiveness options, they require good credit, and each lender has unique terms and conditions that may result in a confusing array of different interest rates and repayment plans.
“With the loss of the Graduate PLUS loan program, paying for my own schooling is going to be much more difficult, and I will probably have to turn to private loans to make up the difference. Taking out private loans would definitely be more costly in the long run, and also not as forgiving in terms of payments. This would put me in a tight financial situation that has been making me reconsider my decision to apply and attend med school,” Lam said.
Hundreds of thousands of undergraduate students who are reliant on federal loans are reexamining their five-year plans.
“The graduate school lifetime cap is a big cause for concern. Throughout my first year, I toyed with the possibility of going to law school, but I don’t think that that is necessarily realistic for me anymore. While I still hope to attend graduate school, I think that I’m definitely leaning more towards the idea of doing a one-year master’s, because I think that that would be a much more viable option for me economically,” Johnson said, adding that even with that change in plans, she wasn’t sure she’d be able to afford it.
As some students seek expedited programs to lessen their time in graduate school, others are adjusting their application lists to focus on schools they can afford with smaller or no loans at all.
Jeff P., a rising senior at the Clark Honors College of the University of Oregon, originally planned on applying to the entire T14 list of top law schools, as well as UCLA, the University of Washington, and the University of San Diego, with his safety schools being the McGeorge School of Law in Sacramento and the law school at UO. This list has since changed.
“Now that the Big Beautiful Bill passed, I eliminated all the T14, and McGeorge became my number one school, as I’ll get a full ride, and Sacramento is affordable compared to Seattle or Southern California,” he said. “I was expecting to take out massive loans [for my target schools], and with caps on loans and the likely removal of Public Service Loan Forgiveness, that won’t work anymore. Now I’m prioritizing debt-free from a middle-tier school.”
As the OBBBA takes effect, scholarships will become increasingly important for students who would otherwise rely on federal loans. Hojung Park, a 2019 graduate of the University of Chicago and an LSAT tutor who is also applying to law school next cycle, has already seen more students ramping up their test prep. He predicts that the LSAT will become more competitive in the coming application cycles, as scholarship money—typically awarded to people with higher scores—is now “more important than ever before.”
The bill “is very much on people’s minds. Every single one of my students is motivated by the desire to do better on the LSAT, not just to affect what kinds of schools they’re getting into, but to secure the best possible scholarship package,” Park said.
While options like scholarships, choosing more affordable schools, or studying abroad can help reduce debt, many students are still prepared to take out private loans to attend graduate or professional school. Some see pursuing another degree as the best option to pay off their accumulated debt from undergrad.
“I love school, that’s the motivation for me, but there’s also obviously a career aspect to it. I believe with a master’s I’ll be able to get a higher-paying job, which will help me pay back some of these loans faster,” Johnson said.
Other students mentioned being ready to set aside their ideal career paths to tackle debt. Claire Talmon, a rising junior at Wellesley College (where I also go to school), is studying economics and psychology. She is paying her undergraduate tuition through a mix of federal and private loans, and is expecting to take out further loans in order to attend law school.
While Talmon says she does not want to go into corporate law, she plans to do so for a few years following law school in order to “pay off debt in the first couple of years of working” before moving on to either criminal or family law.
Nicole Park, associate director and adviser for pre-law at Wellesley College, stresses that among all the factors to consider, students need a realistic plan for how they will pay for a professional degree and what kind of job will make that debt manageable once they graduate.
“People really need to be very, very thoughtful and plan ahead about what their starting salary is likely to be, so they can make careful decisions about debt, especially knowing that the private loan terms are probably not going to be favorable to borrowers—make educated decisions about what they’re getting into financially,” Nicole Park said.
Every student I talked with emphasized that they are not making their decisions lightly. From career choice to lifestyle, taking on any sort of loan will have significant impacts on one’s future. “The loans I do have to take out will cripple me for the rest of my life. It’s always a bit of a stressor in the back of my mind,” Johnson said.
Those considering private loans—which can have variable or fixed interest rates—are especially concerned with how debt will affect them long term. “Private loans would definitely influence the way I’d have to live during my time in med school as well as fresh out of med school. Tight budgets and little to no time or money [for] nonessentials would definitely be necessary,” Lam said.
The financial consequences of the OBBBA will inevitably force many students to turn away from their hopes of attending graduate or professional school, Hojung Park said. “I think the bill will decrease people’s likelihood to go to grad school. They might decide to not go if they don’t get the scholarship money that they want. I think overall, you’ll probably see more really capable, intelligent people that would have normally gone to grad school make the decision to start their own companies to try to generate income,” he said.
Down the line, entire career fields that rely on advanced degrees could see rapid shifts in who can realistically enter them—and who cannot. “There’s whole groups of people who now won’t have access to legal education because they either can’t pay out of pocket or aren’t able to set themselves up in a position where they can get merit scholarships, so it’s going to be a different world in terms of access to legal education,” Nicole Park said.
According to the Association of American Medical Colleges, the U.S. is already facing a shortage of up to 124,000 physicians by 2034. Observers warn that the OBBBA will exacerbate the workforce shortage, causing ripple effects that could devastate communities—especially rural areas—nationwide.
“The new caps will increase that lack of people going into those fields, and that’s going to affect the high-need areas. Rural areas, for example. There already is the lack of health care availability; because of the lack of people entering those fields, this is just going to exacerbate that,” Mayotte said.
With millions of students set to be impacted, some are calling on graduate and professional schools to either increase the number of resources and scholarships for students or take on a larger role in educating applicants on financial packages and loan payment plans.
Still, given the recency of the OBBBA’s passage, the experts I interviewed stressed the present need for robust education to ensure that students and families understand the new changes.
Without clear understanding, there is a real risk that the new caps will blindside borrowers.
The OBBBA “hasn’t hit everybody’s radar yet, and my fear is that some people might miss that this cap is there altogether until they find out they hit the cap. The outreach on these new caps is going to be really, really important,” Mayotte said.
