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The US Department of Education, under the Trump administration, is advancing a significant overhaul of student loan repayment that could make financing graduate and professional degrees more difficult. A central and contentious part of the proposal involves eliminating the Grad PLUS loan program, which currently allows students to borrow up to their full cost of attendance. In its place, the department is proposing strict new annual and lifetime borrowing caps: $20,500 per year and $100,000 total for graduate students, and $50,000 per year and $200,000 total for professional students. These changes, which are currently in the negotiation phase and are slated for final implementation in July 2026, are intended to curb excessive student borrowing. However, education experts warn this could severely limit financing options, potentially forcing students to forgo enrollment or turn to more expensive private loans to cover the gaps.
A key point of debate during the negotiations was the department’s list of only ten professional degree programs that would qualify for the higher borrowing cap. This list includes fields like medicine, law, and dentistry but notably excludes crucial areas such as clinical psychology, engineering, business, and education. Negotiators from various universities and state departments expressed deep concern, arguing that this limitation would devastate programs essential to the workforce and economic development. In response to the criticism, the Department of Education indicated the list is „fixed at this point in time” but proposed an „interim definition” that would grandfather in students enrolled in professional degree programs before July 1, 2027, offering some temporary protection.
The proposed changes have sparked significant concern among education experts and institutional leaders regarding their potential impact. Clare McCann of American University’s Postsecondary Education and Economic Research Center highlighted that the „significant reductions in federal borrowing” will leave many students scrambling to fill financing gaps. The implementation timeline adds another layer of complexity, as colleges may not know the final rules until just before the financial aid award year, creating uncertainty for prospective students. While the Department of Education, represented by Undersecretary Nicholas Kent, defends the plan as a necessary reset to create a simpler and more accountable system, critics fear it will create new barriers to higher education and hinder the development of a skilled workforce in fields outside a narrowly defined list of professions.
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