Higher education leaders are closely watching for potential long-lasting enrollment and recruitment impacts of the Trump administration’s Big Beautiful Bill. Postgraduate programs may be the biggest pain point.
Grad PLUS, which offered uncapped, unsubsidized loans for graduate students, will be eliminated beginning July 2026. Graduate and professional students pursuing law or medical school will face a lifetime cap of $100,000 and $200,000, respectively.
“The Graduate PLUS loan is what a whole lot of students use to borrow if $20,500 per year isn’t enough. And for a lot of grad programs, it’s not,” Chuck Knepfle, vice president of enrollment management at Portland State University, told Oregon Public Broadcasting.
A new ROI provision included in the reconciliation bill may disproportionately target postgraduate programs. NASFFA, the National Association of Student Financial Aid Administrators, says next year’s “aggressive” deadline could constrain access for millions of students.
Here’s how this could change postgraduate programs.
Reduced student diversity in postgraduate programs
Black students may face a disproportionate impact from capped borrowing limits, considering they are more likely to rely on loans and tend to borrow larger amounts for postgraduate programs, according to The Institute for College Access and Success.
“Because of persistently high levels of racial wealth inequality, however, changes to graduate borrowing and potential caps on borrowing levels for graduate and professional education risk closing doors of opportunity to higher-paying professional fields,” the report read.
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The nonprofit suggested that the pre-set cap may drive institutions to reduce program costs. This may reduce the resources available for low-wealth students.
Shortages in Black and low-income students pursuing advanced fields would not only hurt an institution’s enrollment but could also potentially lead to poor economic, social and health outcomes for the country.
Strains on master’s degree programs
The new law’s “Do No Harm” provision allows the federal government to block certain programs from providing loans if earnings from former students fall below that of a lower-level credential.
Three percent of master’s degree borrowers are enrolled in programs that would fail the
earnings test, according to a June analysis from the Urban Institute. The rates are even higher at HBCUs—11%.
Mental and social health programs are most likely to fail the earnings test and often lead to high debt-to-earnings ratios.
Between bachelor’s, master’s and doctoral programs, master’s degrees had the lowest percentage of programs that would pass the test, according to the American Enterprise Institute.
Fledgling student success
Higher education institutions will need to find innovative ways to control postgraduate program costs to attract students with limited federal loan options, says Allison Garrett, attorney at Spencer Fane and former chancellor of the Oklahoma higher education system.
One way colleges and universities may adapt is by consolidating program sections and limiting course options to accommodate more students to follow the same tracks.
Another way institutions may try to mitigate reduced aid options is by seeking more scholarship funding to assist students who reach their loan cap. However, this could be particularly difficult for private institutions facing new endowment tax rates. For example, colleges and universities valued between $750,000 and $1.25 million face a 4% tax rate.
“New taxes and spending cuts will force even more difficult decisions on chief business officers and further strain revenue that helps make college affordable for students and families,” said NACUBO President and CEO Kara Freeman.
Furthermore, the reconciliation bill’s $1 trillion cut to federal Medicaid will add further downstream pressure on state allocations for public higher education.
As a result, more students may need to work while enrolled in a postgraduate program to sustain themselves, slowing their progress toward a degree, Garrett says. Students may also have to take out private loans, which have historically lacked income-driven repayment options.
