The Big Beautiful Bill: Rewriting the Rules on How Students Borrow for College

Higher education just got harder to access for thousands of students chasing big dreams and even bigger degrees. Buried inside a massive piece of legislation recently signed into law, dubbed by some lawmakers as the "Big Beautiful Bill," are provisions that threaten to make college less attainable—particularly for graduate and professional students. If you’re a parent planning for your child’s future, or a student hoping to become a doctor, lawyer, or researcher, this one’s for you.

What the New Loan Caps Really Mean

The headline change: the elimination of the federal Grad PLUS loan program, which previously allowed students to borrow up to the full cost of attendance for graduate and professional degrees. In its place, the new law imposes strict loan limits:

• Graduate school loans capped at $20,500/year with a lifetime max of $100,000.
  
• Professional school loans (e.g., medical, dental, law) capped at $50,000/year with a lifetime max of $200,000.

At first glance, these amounts may seem generous. But when you consider that the average med school graduate walks away with over $264,000 in debt, and top programs can cost $400,000 or more, the new caps create a financial chasm. Students will be forced to seek private loans—often with higher interest rates and fewer repayment protections—or put their educational dreams on hold altogether.

🎯 Target hit? Not quite. The legislation was designed to rein in tuition inflation and prevent universities from exploiting unlimited federal funds. But the real-world outcome is likely to be far more damaging, especially for students from low-income backgrounds, first-generation college-goers, and those pursuing high-cost professional paths like medicine.

Who’s Hit the Hardest

🩺 Medical and dental students are perhaps the most immediately impacted. These students are already facing skyrocketing costs, with some programs topping $100,000 per year. A hard loan cap could deter bright, motivated individuals from entering fields that are critical to public health—at a time when we’re already facing a physician shortage projected to exceed 86,000 by 2036.

🏫 First-generation college students often lack the family resources or financial literacy to navigate the complexities of private lending. Without access to sufficient federal aid, many will simply opt out of pursuing higher education.

💸 Low-income families will see the affordability gap widen. Federal loans historically offered lower rates and safer repayment plans. Stripping away these options forces vulnerable borrowers into riskier debt arrangements—or no degree at all.

In essence, the Big Beautiful Bill delivers a big blow to educational equity.

What’s Driving the Change?

Critics of the Grad PLUS program argued that unlimited borrowing enabled schools to raise tuition with little accountability. By capping federal loan access, the hope is that institutions will be forced to control costs. But evidence shows medical school tuition growth slowed after Grad PLUS was introduced—suggesting the problem may not be as clear-cut.

Instead, this new policy may create two classes of students: those with family wealth who can still afford elite education, and those left behind by a system that promised access but delivered barriers.

The Ripple Effect on America’s Workforce

The implications go beyond just student borrowers. The American healthcare system, already stretched thin, may find itself in deeper crisis if fewer students can afford to enter medicine. Public health, legal advocacy, and scientific research—fields that require advanced degrees but often offer modest pay—will suffer a talent drain.

📉 This could translate into longer wait times for patients, fewer underrepresented professionals in leadership, and slower progress on social justice and scientific innovation.

What You Can Do

Now more than ever, navigating the changing student loan landscape requires expert guidance. Whether you're a parent wondering how to finance college or an HR leader evaluating benefits, one thing is clear: the need for proactive financial planning has never been greater.

✨ If your employer offers PeopleJoy as a benefit, you have access to personalized college financial coaching and planning. Our advisors help families and employees understand funding options, estimate net costs, compare aid packages, and avoid costly missteps in an increasingly complex system.

🔔 Don’t let policy changes derail your educational goals. Explore how PeopleJoy’s planning tools and financial experts can keep your dreams within reach—even as the rules keep changing.