Trump Admin's Student Loan Limits Push Borrowers to Private Lenders
Summary
New federal student loan limits that took effect July 1, 2026, have reduced how much graduate and professional students can borrow through federal programs. Some students whose tuition exceeds the caps are turning to private loans, which can have fewer borrower protections and depend on creditworthiness.Key Facts
- Graduate students can generally borrow up to $20,500 per year and $100,000 total under the new limits.
- Students in professional programs can generally borrow up to $50,000 per year and $200,000 total.
- The policy eliminated new Graduate PLUS loans for affected borrowers beginning July 1, 2026.
- The Department of Education says the caps aim to limit excessive borrowing and encourage schools to reduce tuition and fees.
- Private lenders set approval terms and interest rates based significantly on a borrower's or co-signer's creditworthiness.
- Sallie Mae reported $3.4 billion in private education loan originations in the third quarter of 2026, up 15 percent from a year earlier.
- Sallie Mae's graduate loan originations reached about $1.4 billion in the quarter, a 119 percent year-over-year increase.
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