New Bill Eliminates Unlimited Graduate Loans, Forces Universities to Compete on Price
The federal government is backing away from its usual role in student loans and financing higher education. Provisions in President Donald Trump’s “One Big Beautiful Bill,” which was signed into law on Independence Day, has provisions that begin to reverse the federal government’s role in the matter.
According to the Wall Street Journal, the bill includes restrictions on how much students can borrow as well as how they pay back their loans. The move has pushed some to reassess where they are getting loans from, and going to private lenders, who usually charge higher interest on student loans.
Starting in 2026, the era of unlimited government-backed loans will be over. The new law puts a firm cap of $100,000 on borrowing for master’s degrees and $200,000 for professional degrees. More importantly, it completely eliminates the Graduate PLUS program, a taxpayer-funded slush fund that allowed students to borrow the full, sky-high cost of attendance with no questions asked. Parents will also see new limits on how much they can borrow for their children’s education.
This move is a direct reversal of the Biden administration’s reckless policies, which paused loan payments and attempted to cancel huge amounts of student debt. Those plans would have unfairly shifted the entire burden onto the shoulders of taxpayers, including millions who never went to college or responsibly paid off their own loans. Trump’s new plan ensures that the responsibility for educational costs falls on the students and the universities themselves, not the American public.
According to the Wall Street Journal, the bill includes restrictions on how much students can borrow as well as how they pay back their loans. The move has pushed some to reassess where they are getting loans from, and going to private lenders, who usually charge higher interest on student loans.
Starting in 2026, the era of unlimited government-backed loans will be over. The new law puts a firm cap of $100,000 on borrowing for master’s degrees and $200,000 for professional degrees. More importantly, it completely eliminates the Graduate PLUS program, a taxpayer-funded slush fund that allowed students to borrow the full, sky-high cost of attendance with no questions asked. Parents will also see new limits on how much they can borrow for their children’s education.
This move is a direct reversal of the Biden administration’s reckless policies, which paused loan payments and attempted to cancel huge amounts of student debt. Those plans would have unfairly shifted the entire burden onto the shoulders of taxpayers, including millions who never went to college or responsibly paid off their own loans. Trump’s new plan ensures that the responsibility for educational costs falls on the students and the universities themselves, not the American public.
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