NEW YORK – New limits on federal student loans have left many students, like Chloe Frabotta, feeling anxious as they embark on their educational journeys. Chloe, a 25-year-old aspiring physician assistant, recently began her studies in New York City. The changes to student loans that took effect this fall have introduced caps on how much students can borrow for specific programs, and also limited the amount parents can borrow to help pay for their children’s education.
Before she even started her program, Chloe was uncertain if her course would qualify as a “professional” program with higher loan limits. To manage her finances, she borrowed around $6,000 in federal loans for her first trimester and took out additional private loans with her mother as a cosigner. “In my circles, a lot of people were like, ‘I guess that’s what I’m going to have to do, and I’m going to try to make it work,’” she shared.
Students across the country are increasingly turning to private lenders to cover the gap between the cost of their educational programs and the amount they can access through federal loans, which typically come with more favorable repayment terms and potential forgiveness options. The financial impact on private lenders has been significant; for instance, SoFi reported $2.9 billion in student loan originations for the third quarter, nearly double what it was a year earlier. Similarly, Sallie Mae announced a 119% increase in graduate loans.
The changes stem from President Donald Trump’s “Big Beautiful Bill,” which imposed new caps on the borrowing limits for graduate students. Under this legislation, students in professional degree programs are now limited to borrowing $200,000, while those in other graduate programs are capped at $100,000. Previously, students could borrow up to the full cost of their degree.
For new borrowers, there is now a lifetime borrowing cap of $257,500, which has raised concerns among students and institutions alike. According to estimates, more than half a million borrowers may need to secure an additional $20,000 annually from sources other than federal loans. This is particularly challenging for students in expensive fields like medicine and law, especially in areas with a high cost of living.
While the Trump administration argues that these new limits will reduce excessive borrowing and compel schools to reconsider their tuition costs, critics contend that most colleges are unable to lower their fees, potentially creating more obstacles for students from low-income families.
In response to the financial strain, some colleges have begun to step in. For example, graduate student borrowing at South Carolina Student Loan has increased by 400% this year due to expanded options for students. The University of Kansas School of Law has also started offering loans to assist its students with funding, emphasizing the importance of making education accessible.
“Now, frankly, private banks get to choose who goes to law school,” said Steven Freedman, associate dean of admissions at the University of Kansas School of Law. In addition, Lewis & Clark College in Portland, Oregon, introduced a new scholarship for students in financial need due to the loan caps.
The recent loan cap changes have left many students confused, especially regarding which programs qualify for higher borrowing limits. This uncertainty even led to legal disputes, delaying financial aid processing for students. Fortunately, some degree programs, like nursing and physical therapy, were ultimately recognized as eligible for larger federal loans.
Chloe’s program was eventually deemed professional, allowing her to borrow up to $50,000 annually. However, she opted to borrow only a fraction of this amount, wary of potential future changes. Prior to returning to school, she earned a bachelor’s degree from Boston College and worked as a medical assistant.
Another student, Madison Jessen, decided to use most of her savings to cover her first semester expenses due to the uncertainty surrounding the loan caps. She noted that several friends who had planned to pursue the same path have since changed their minds.
Dr. Robert Harrington, dean of Weill Cornell Medicine, expressed concern that these changes could limit access to educational programs for students from less affluent backgrounds. “What we don’t want to see is our programs just becoming the purview of people whose family can afford to pay that bill,” he stated.
In summary, the new federal student loan caps are reshaping the financial landscape for many students. While some institutions are stepping up to offer assistance, the long-term implications for access to education remain a pressing concern.
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Hollingsworth reported from Mission, Kansas.
