Key facts
- A federal bill aims to eliminate the Graduate PLUS federal student loan program, impacting nearly half a million graduate students annually.
- The Grad PLUS program allows students to borrow up to the full cost of their schooling, with an average of $32,000 borrowed annually.
- Republicans support the elimination, citing cost savings and tuition inflation control, while opponents warn of reduced access to professional degrees.
- The measure passed the Senate and is heading back to the House, with President Trump urging swift passage.
- States such as Minnesota and Connecticut are developing or expanding their own loan programs to support graduate students.
- Some state-based loan programs offer more favorable interest rates and repayment terms compared to private alternatives.
A significant federal tax-and-spending bill moving through Congress proposes to eliminate the Graduate PLUS federal student loan program, a move that could affect nearly half a million graduate students annually by removing access to tens of thousands of dollars in loans.
The Grad PLUS program, established in 2006, allows students to borrow up to the full cost of their education, less other financial aid. According to the Department of Education, about one in five master's graduates and a quarter of STEM graduates who take out loans rely on these federal funds. Last academic year, over 440,000 graduate students borrowed approximately $14 billion through the program, with an average individual loan amount of nearly $32,000.
Republicans in Congress argue that eliminating the program would save taxpayers money, help rein in tuition inflation, and encourage greater participation from private lenders. Madison Marino Doan, a policy analyst at the Heritage Foundation, stated that ending the program is a step toward restoring accountability in higher education spending. The elimination of Grad PLUS loans was also included in Project 2025, a conservative blueprint for a potential second Trump term.
However, opponents of the measure, including student aid expert Mark Kantrowitz, warn that removing this federal aid could make professional degrees, such as those for lawyers and doctors, unattainable for many students, particularly those from low-income and minority communities. The bill would also impose a new $100,000 aggregate limit on Direct Unsubsidized Loans for master's students and $200,000 for professional students.
The measure recently passed the Senate with Vice President JD Vance casting the tie-breaking vote and is now returning to the House for consideration. President Trump is reportedly pushing for the bill's final passage this week. The termination of the Grad PLUS program is slated for July 2026, though current students who have already taken out at least one Grad PLUS loan would have protections allowing them to access the program for three academic years or until their program's completion.
In response to the potential federal funding gap, states are beginning to explore and expand their own loan programs. Minnesota and Connecticut are among the states looking to offer alternative loan options. Currently, thirteen states have established loan programs to support postsecondary education for their residents, with some offering more favorable interest rates and repayment terms than traditional private loans.