The One Big Beautiful Bill Act: Changes to Graduate Student Loans
Edited by Ashley D'Amato
Changes to Federal Student Loans
The cost of attending law school has long been a financial concern for students pursuing careers in the legal field. Many students rely on federal student loans to help cover expenses such as tuition and housing that would otherwise be difficult to afford. Recent changes to federal student lending outline alterations to how future law students will access funding for their education. In July of 2025, Donald Trump signed the One Big Beautiful Bill Act into law, which introduced many changes to various federal aid programs (United States, Congress). One of these new changes included new borrowing limits for graduate and professional students, along with the elimination of Graduate PLUS loans for most new borrowers beginning in July 2026 (United States, Congress). These changes have changed how students will cover educational expenses that exceed the new limits.
Before the Big Beautiful Bill Act, graduate and professional students had access to two major types of federal student loans. Direct Unsubsidized Loans generally allowed students to borrow up to $20,500 per academic year. Students who needed additional financial assistance could also apply for Graduate PLUS loans, which allowed them to borrow up to their school’s total estimated cost of attendance for their program of study (Looney).
Section 81001 of the Big Beautiful Bill Act established new federal borrowing limits for graduate and professional students. Under these new rules, students pursuing professional degrees, including law degrees, can borrow up to $50,000 a year, with a total limit of $200,000 (United States, Congress). Other graduate students are limited to $20,500 per year and $100,000 total. The legislation also eliminates access to Graduate PLUS loans for most new graduate and professional students (United States, Congress).
Although these changes went into effect on July 1, 2026, they do not affect every graduate or professional student in the same way. Students already enrolled by June 30, 2026, who had previously received a qualifying federal loan for their program may continue borrowing under the previous rules for up to three academic years or the remaining length of their program, whichever is shorter (Federal Student Aid, “Direct PLUS Loans”). However, students entering law school in the fall of 2026 or thereafter are subject to these new borrowing caps, prompting alternative funding sources when educational expenses exceed federal program limits.
Financial Challenges for Law Students
Although this legislation limits federal borrowing, it does not directly reduce tuition or other educational expenses. Students who cannot cover the remaining expenses through scholarships, savings, or family assistance may have to consider private student loans. Unlike federal loans, private loans often have distinct eligibility requirements and fewer repayment protections (Consumer Financial Protection Bureau). Private loans are issued by lenders that establish their own borrowing requirements. Students may need a strong credit history or a cosigner to qualify, and interest rates can vary depending on their financial circumstances (Consumer Financial Protection Bureau). Private loans also generally do not qualify for federal programs such as Public Service Loan Forgiveness, which can be especially important for law graduates pursuing careers in government or public interest law (Federal Student Aid, “Public Service Loan Forgiveness”).
The financial impact of these changes varies from student to student. Those with access to family assistance, savings, or scholarships have many more options for covering expenses beyond the federal borrowing limits. However, students who rely almost entirely on financial aid could face greater difficulties, especially if they cannot qualify for private loans or receive favorable interest rates. This could make attending certain law schools more difficult for students from lower-income backgrounds, even when they meet the academic requirements.
These financial changes also restructure debt repayment post-graduation. According to the National Association for Law Placement, median starting salaries for 2024 law graduates were $160,000 in private practice, $79,900 for government positions, and $72,000 for public interest jobs (National Association for Law Placement). These differences can make repayment a greater concern for graduates entering public defense, legal aid, or other public service positions. The American Bar Association has also raised concerns that federal borrowing restrictions could make student debt more difficult to manage and affect access to public interest legal careers (American Bar Association). Although limiting federal loans may reduce government program lending, it does not necessarily reduce the overall cost of earning a law degree.
The Future of these Financial Changes
Supporters of the new federal borrowing limits argue that restricting student loans could help reduce excessive borrowing and encourage universities to control tuition costs (U.S. Department of Education). However, the legislation does not require law schools to lower tuition, and universities have financial obligations including faculty salaries and academic programs that may take some time to adjust. While borrowing restrictions could eventually influence how universities set tuition, any major changes can take an indeterminate amount of time.
Another concern is whether reducing borrowing will actually lower student debt. According to a May 2025 analysis by the Congressional Budget Office, an earlier proposal to restrict Graduate PLUS loans and graduate borrowing was projected to reduce federal spending by billions of dollars over the following decade (Congressional Budget Office). However, reducing government spending does not necessarily mean students will need less money to complete their degree, particularly if tuition and living expenses remain high. Students may still need to borrow similar amounts through private lenders. This raises questions about whether the legislation will reduce educational debt overall or shift how students finance their education.
The Department of Education has argued that the new restrictions will put downward pressure on tuition and encourage universities to become more accountable for their educational costs (U.S. Department of Education). However, the extent to which these changes will affect tuition remains uncertain, especially so soon after their implementation. Students entering graduate and professional programs may have to make financial decisions before universities make any significant adjustments to their costs. Looking at the actual cost of attending a public law school, such as Florida State University, helps show how these federal borrowing limits could affect students in practice.
Effects on FSU Law Students
The effects of these new federal borrowing limits can be applied to the cost of attending FSU’s College of Law. According to FSU’s estimated cost of attendance for the 2026-2027 academic year, first-year law students who are Florida residents face around $44,154 in annual expenses, while out-of-state students face an estimated $70,739. Although the estimated cost for Florida residents falls below the new $50,000 annual borrowing limit, FSU’s estimated cost of attendance for nonresident students exceeds that limit by $20,739 (Florida State University, “Cost Estimates”). While this includes living expenses that may vary between students, out-of-state tuition alone accounts for $46,009 of the annual cost.
Students who do not qualify for scholarships or other forms of financial aid face greater difficulties covering their school expenses, especially if they are paying out-of-state tuition. FSU has also acknowledged the changes to federal graduate and professional lending through the Office of Financial Aid, which explains the new borrowing limits and the elimination of Graduate PLUS loans for incoming students (Florida State University, “Upcoming Federal Changes”). While these restrictions do not mean that students will be unable to attend law school, they may require some students to reconsider their financing options or take on private loans.
Ultimately, the One Big Beautiful Bill Act represents a significant change in how future law students can finance their education. Although the legislation places new limits on federal borrowing, it does not directly address the tuition and living expenses that students must continue paying. The situation at FSU shows how these changes may affect students differently depending on their individual situations, depending on aspects such as their residency status and financial resources. As universities and students continue adjusting to the new restrictions, the question remains whether limiting federal loans will make legal education more affordable or change how future law students finance their education.