The One Big Beautiful Bill Act (OBBBA) was signed into law by President Donald Trump on July 4, 2025 after it passed in the House and Senate. Codifying much of the second Trump administration’s economic policies, one of the most significant policy changes is the elimination of Graduate (Grad) PLUS loans — the only federal loan that covered the entire cost of attendance for eligible graduate and professional students.
The amendments to student loan programs go into effect on July 1 — meaning the class of 2026, many of whom will pursue graduate studies this fall or later, can neither use nor be grandfathered into a Grad PLUS loan plan, an option available to borrowers since 2006.
With only existing unsubsidized loans available, graduate students will be able to borrow no more than $20,500 per year. Professional students (a vague category yet to be delineated), however, will now be able to borrow up to $50,000 per year in unsubsidized loans to compensate for the elimination of Grad PLUS. The aggregate limits now stand at $100,000 for graduate students and $200,000 for professional students — an increase from the $138,500 pre-OBBBA limit on subsidized and unsubsidized loan totals. The bill also introduced a new lifetime limit of $257,500 for all student borrowers, excluding Parent PLUS loans taken out for undergraduate studies.
“The Trump administration has made a system nearly impossible to navigate for those who do not have access to wealth, ripping higher education from thousands. This decision is just one in a slew of actions that have taken away opportunities and rights from thousands of Americans.” Madison Montoya, FCLC ’26
The Trump administration and advocates of the OBBBA have cited ceilingless university costs of attendance across the nation as their motivation for capping future students’ loans at these institutions. Proponents anticipate a “trickle-down” effect that begins not with the top of the pyramid but the bottom: If students increasingly cannot afford higher education, colleges and universities will have no choice but to lower their high costs of attendance (COA).
Whether or not this prophecy is fulfilled, the class of 2026 and those entering graduate school in the next few years will have to cope during a liminal time between Grad PLUS loans’ withdrawal and optimistically anticipated COA reductions.
Without a stable federal loan program’s full coverage of universities’ costs of attendance, borrowers must now pick between postponing their plans, canceling them altogether and relying on private lenders.
“The Trump administration has made a system nearly impossible to navigate for those who do not have access to wealth, ripping higher education from thousands. This decision is just one in a slew of actions that have taken away opportunities and rights from thousands of Americans,” Madison Montoya, Fordham College at Lincoln Center (FCLC) ’26, said.
Montoya is a graduating senior pursuing a career in law; the passage of OBBBA informed her decision to take a gap year.
“As someone who has to fund their own path to law school, it’s clear that the cost of attendance certainly isn’t getting any cheaper. It makes the choice to pursue a graduate education even harder when the safer and essential loan resources are no longer available to me,” Montoya said.
With costs of attendance exceeding $100,000 per year, a significant percentage of rising first-year graduate and professional students will have to take out substantial private loans.
Though similarly unsubsidized, private loans differ on many significant points from their public, federal counterparts. One of these is their eligibility for public service loan forgiveness (PSLF). The PSLF program only applies to the federal loans of graduates employed by government or not-for-profit organizations. But the prospect of loan forgiveness has enabled students interested in serving the commonweal to pursue graduate and professional studies with less apprehension about how their future salaries will compare to their current debts.
With costs of attendance exceeding $100,000 per year, a significant percentage of rising first-year graduate and professional students will have to take out substantial private loans. Less of public interest students’ debts will therefore be eligible for forgiveness.
This watershed, in-between period may not only have implications in the economic makeup of the graduate and professional job markets of the near future, but it also has the potential to further foreground the expected-income factor in students’ decisions to join either the public or private sector.
Emily Strlekar, FCLC ’26, will attend New York Law School (NYLS) this fall in pursuit of a public interest career advocating civil liberties and gender justice.
“Definitely, (the) majority of the reason I chose NYLS is because they offered to cover 75% of the tuition,” Strlekar said when asked whether cost of attendance and financial aid were the most important factors in her decision.
Some professional schools have long-standing systems in place that are capable of weathering the administrative caprices of the U.S. Department of Education. Fordham Law, for example, is one of many private law schools whose Loan Repayment Assistance Programs (LRAPs) now cover private as well as federal loans (though most require that federal avenues be exhausted first). Institutional LRAPs are income-driven plans wherein the university and the alum, with or without the supplement of the federal PSLF program, repay the alum’s loans over a fixed time period so long as they maintain a career in public interest and earn less than a specified income (maximum salaries vary from $70,000 to $90,000).
Only universities with ample endowments are able to offer such programs to its alumni, whose outcomes, in turn, determine future endowments.
The Office of Student Financial Services shared the existing and developing resources with which they are attempting to meet this moment.
Although the OBBBA has increased competition among private lenders seemingly in borrowers’ favor — private student loan rates are lowering for those with good credit and high expected earnings — dependence on such lenders will likely disadvantage those with relatively poor credit histories who cannot secure a co-signer, unlike federal loan policies.
While federal education loan interest rates, caps and repayment plans remain fixed for all borrowers without an “adverse credit history,” private education loans promise more variable financial investments in higher education based on students’ socioeconomic statuses. The U.S. Department of Education has not yet announced the federal education loan interest rates for post-OBBBA borrowers in 2026 and 2027, though the current rate for unsubsidized graduate and professional loans is 7.94%.
How will Fordham approach this shifting landscape of financial aid upending two-decades worth of higher education norms?
The Office of Student Financial Services shared the existing and developing resources with which they are attempting to meet this moment. Brian Ghanoo, associate vice president of student financial services, confirmed that Fordham, too, expects the OBBBA to drive more students toward private loans than in previous years.
The Office has had a preferred private education lender list for years, according to Ghanoo. To prepare for the potential passing of the OBBBA, the office met with a “wide range of private lenders — including large and small, nonprofit and for-profit entities, and state agencies” and conducted a Request for Information process to “gather data on their product and terms.”
“For undergraduate students, we spoke with lenders willing to approve students based on academic merit rather than a cosigner’s credit history, and whose products are reasonably priced,” Ghanoo said. “For graduate students, we spoke with lenders regarding increased approval rates that align more closely with what students previously experienced with the Graduate PLUS Loan.”
The office expects to publish an updated preferred lender list for the upcoming academic year in the coming weeks for both undergraduate (Parent PLUS loans have been capped, too, at $20,000 per year) and graduate students.
As opposed to its intended “trickle down effect,” Ghanoo suggested that the OBBBA may actually be trickling up as universities like Fordham attempt to keep COAs and students’ prospective debt from rising any higher.
“While discussions around COA’s have not materialized at this point, the University has reduced its own discretionary spending, implemented a hiring restriction, and is consistently looking for efficiencies to keep costs as low as possible,” Ghanoo said.
However, even a plateau in the cost of attendance would necessitate reformed substitutes for diminished Grad PLUS federal loan opportunities.
Ghanoo shared that several of Fordham’s graduate schools are responding to this uncertainty by giving students the option to start their coursework this summer instead of the fall.
“This allows them to qualify for the legacy provision, which preserves their eligibility to borrow Graduate PLUS Loans for up to three years. To qualify, they need to have a federal loan disbursed by June 30,” Ghanoo said, referring to the practice of “grandfathering in” incoming students who would not, in former circumstances, have applied for a pre-July loan disbursement.
A more lasting solution lies in the concept of “institutional loans,” internal lending programs that allow students with financial need to borrow directly from the university they are attending. Harvard Law School, Yale Law School, Columbia Law School and Washington University School of Law each offer such need-based programs that mimic the federal subsidized or unsubsidized loan structure — often touting fixed interest rates, grace periods and standard repayment plans.
While continuing graduate students are advised to avail themselves of Grad PLUS loans, the Office of Financial Aid recommends that incoming Fordham graduate students leverage savings before borrowing and take advantage of the university’s monthly payment plan.
At Fordham, the supplement of institutional loans to dwindling federal and variable private options is not visible on the horizon.
“Schools that make loans directly to students are subject to New York State Banking Law, which governs licensing, servicing, and compliance requirements. Most universities are not structured or staffed to take that on,” Ghanoo said.
While continuing graduate students are advised to avail themselves of Grad PLUS loans, the Office of Financial Aid recommends that incoming Fordham graduate students leverage savings before borrowing and take advantage of the university’s monthly payment plan. Students are also encouraged to consider Fordham’s forthcoming list of vetted preferred private lenders.
“(Private education) loans often carry lower interest rates than federal loans and do not charge an origination fee, though repayment terms tend to be less flexible,” Ghanoo said.
Student Financial Services has compiled this information and continues to update a webpage tracking the impact of the OBBBA on Fordham undergraduate and graduate students, which includes a section titled “Final Details Awaiting Clarification.”
PLUS loans were established in 2006 and endured 20 years. Fordham, established in 1841, has endured nearly 185. In that time, it has welcomed classes of students with diverse economic backgrounds into a service-oriented ivory tower by means of scholarships, grants, and public or private educational loans. The university’s humble philosophy predates PLUS loans, but it has also evolved to accommodate federal provisions. How Fordham evolves now to maintain its educational, service and community values in the face of the OBBBA is but another detail of which we await clarification.