The Department of Education announced Thursday that it will cap federal student loans for graduate programs, a change officials say is aimed at lowering college costs and reducing long-term debt burdens.
Under the new framework, graduate students will be limited to borrowing $20,500 per year, up to a lifetime cap of $100,000.
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Students enrolled in designated “professional” programs, including law, medicine, dentistry, and veterinary medicine, will be allowed to borrow up to $50,000 annually, with a $200,000 lifetime limit.
The policy, set to take effect July 1, is the final rule implementing reforms from the Working Families Tax Cuts Act, a July 2025 measure backed by President Donald Trump that significantly restructured the federal student loan system. The department said the changes would “lower the cost of college and make student loan repayment easier.”
“The Trump Administration is focused on putting students and taxpayers first, which is why we are implementing durable policies to make higher education more affordable,” said Undersecretary of Education Nicholas Kent.
“President Trump’s Working Families Tax Cuts Act addresses longstanding challenges in higher education and federal student lending, including exorbitant tuition costs, unchecked borrowing, and a confusing maze of repayment options that too often leave borrowers with higher balances despite making payments.”
The department defines “professional” programs as fields such as pharmacy, dentistry, chiropractic care, law, medicine, optometry, osteopathic medicine, podiatry, theology, and clinical psychology.
That definition has previously sparked criticism, however, because it excludes programs such as nursing, physical therapy, and social work, raising concerns about how the policy could affect students entering high-demand public service professions.
The rule also places new restrictions on Parent PLUS loans, capping borrowing at $20,000 per year and $65,000 per dependent student, marking the first time those loans have faced firm limits.
Education officials say the changes are intended to curb excessive borrowing while preserving access to federal aid.
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The department estimates the overhaul will save taxpayers $409 billion by simplifying repayment programs and eliminating what it describes as excessive or unlawful loan forgiveness initiatives. It also projects a $224 billion reduction in outstanding student debt by limiting how much students can borrow.
“After decades of failed policies that have lined the pockets of colleges and universities, enabled overborrowing, and created a confusing repayment system, the need for reform is clear,” the department said.
