Has Washington Made Graduate School Harder To Afford?

A graduation cap placed on a pile of U.S. dollar bills

A new federal loan rule could slam the door on future physician assistant students who need help paying tuition.

Quick Take

Graduate PLUS loans will end for new borrowers on July 1, 2026, under the One Big Beautiful Bill Act.^[4]^[22]
Most graduate students will face a $20,500 yearly cap and a $100,000 total limit.^[4]^[6]^[21]
Many health-related programs, including physician associate training, were left outside the higher professional-school loan tier.^[4]^[19]^[21]
Federal officials say the new limits will curb debt, but critics say they will shrink access to high-cost programs.^[8]^[12]^[21]

Loan Limits Change the Math for Graduate School

Federal student aid rules are changing fast, and the impact could be felt most sharply by students in costly graduate programs. Starting July 1, 2026, Graduate PLUS loans end for new borrowers, and most graduate students will be limited to $20,500 a year in federal loans. Schools and aid offices at the University of Iowa, George Washington University, and other campuses say those limits are now part of planning for the 2026-27 school year.^[3]^[4]^[6]^[22]

The new policy draws a hard line between general graduate programs and a narrow group of “professional” programs. Under the rule, only 11 fields, including medicine, law, and dentistry, can borrow up to $50,000 a year and $200,000 total. Physician associate programs were left out of that higher tier, which has raised concern among educators and advocates who say the training is long, expensive, and tied to needed health care jobs.^[3]^[4]^[19]^[21]

Why Physician Assistant Students Are Worried

Physician assistant education often requires a master’s degree, clinical training, and time away from full-time work. That makes the borrowing cap a real problem for students who cannot cover tuition and living costs out of pocket. The American Academy of Physician Associates says the proposed treatment of physician associate programs could damage the pipeline of health professionals, and its Iowa affiliate warns the borrowing limits fall below the real cost of completing the degree.^[3]^[4]

That concern is not just about tuition. It is also about what happens after federal aid runs out. Betsy Mayotte, president of the Institute of Student Loan Advisors, warned in an ABC 7 interview that private loans may be the only backup, but they can bring higher rates and fewer borrower protections. For families already squeezed by inflation, that is a dangerous shift from federal lending to riskier private debt.^[2]

What Borrowers Lose Under the New Rules

The change does more than cap new loans. The Templeton College of New Jersey says new borrowers after July 1, 2026, also lose access to economic hardship and unemployment deferments. That means fewer safety valves if a graduate cannot find work right away or runs into a sudden financial crisis. The law also keeps a narrow legacy rule for some current students, but that relief is temporary and does not help new borrowers entering school after the cutoff.^[6]^[22]

Starting July 1 — tomorrow — federal Grad PLUS loan caps slash graduate student access to federal lending, forcing borrowers to seek private alternatives. Sallie Mae projects up to 70% origination growth over several years from the shift, while $SOFI is already reporting record…

— The Young Investor (@Young_1nvestor) June 29, 2026

Federal officials defend the policy as a way to stop students from taking on debt they may struggle to repay. The Trump administration’s education department says the changes are meant to make college more affordable and prevent unmanageable borrowing. Critics answer that the government is solving a debt problem by rationing access to education, which could leave needed fields short of talent while pushing more young people toward private lenders and heavier monthly payments.^[1]^[7]^[8]^[12]^[21]

That fight is already playing out in public. Medical and higher education groups say the caps are too low for programs with high tuition and long training paths. Supporters of the change say the old system let borrowing grow without enough guardrails, and that taxpayers should not back endless federal credit. The real test begins when students start applying under the new rules and discover how much less help Washington is willing to give them.^[1]^[7]^[8]^[12]^[21]^[22]