Trump Administration Imposes Caps on Graduate School Loans

The Education Department said Thursday that new caps on federal loans for graduate school would take effect July 1, a move aimed at cutting the cost of postsecondary education.

The loans will be limited to $20,500 per year and $100,000 in total, while loans for professional students, including those seeking medical or law degrees, will face annual caps of $50,000 and a lifetime limit of $200,000.

Current borrowers will be exempted from the limits for the next three years as long as they remain enrolled, according to the department. The changes stem from President Donald Trump’s sprawling domestic policy bill that he signed into law last year.

Administration officials contend that reducing the amount of money that students can borrow will force universities to lower tuition.

“We are instituting a ceiling for institutions to live within their means,” said Nicholas Kent, the undersecretary of education. “This is just basic economics, right? When there is more money in the system, institutions of higher education are going to raise their prices.”

Graduate school loans account for about $125 billion of the $1.7 trillion federal student loan portfolio.

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This article originally appeared in The New York Times.

By Michael C. Bender/Eric Lee
c. 2026 The New York Times Company

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