The law will cap how much graduate students and parents can borrow starting July 2026.
Graduate students will be capped at $20,500 per year, with a lifetime maximum of $100,000. This falls below the total cost of a master’s degree, which typically ranges from $44,640 to $71,140, according to the Education Data Initiative.
Professional students in law and medical programs may borrow up to $50,000 per year, capped at $200,000 total. Earning a law degree in the U.S. costs an average of $206,000, while medical school students face a higher total average of approximately $230,000, according to Education Data Initiative.
Parents who borrow for their children’s education are limited to $20,000 per year with a $65,000 lifetime maximum using the Parent PLUS loan program.
Policy experts predict that these changes will shift borrowers toward private lenders.
“We’re going to see huge growth of the private student-loan market as a result of this bill,” said Bryce McKibben, senior director of policy and advocacy at the Hope Center for Student Basic Needs at Temple University, in an interview with MarketWatch.