How will new limits on grad-school loans affect prospective students in NC?
AI-generated summary reviewed by our newsroom.
- New grad school loan caps apply starting July 1: $50,000 and $20,500 annual limits.
- Jeff Jackson sued the Education Department over its narrow professional degree definition.
- Campbell and Duke law cite gaps between cost of attendance and the new caps.
New limits on how much money students can borrow from the federal government to attend graduate school kick in this summer.
How those loan caps — laid out in President Donald Trump’s One Big Beautiful Bill Act — might impact schools and students in North Carolina is not yet fully clear. People on either side of the issue have opposite opinions on how it will impact the affordability of advanced degrees.
The idea behind the borrowing caps is to put downward pressure on the cost of tuition. The thinking goes like this: if students are able to borrow up to the cost of attendance — as they can under the soon-to-be-discontinued Graduate PLUS program — then universities can charge as much as they want. Students will always be able to pay and deal with the debt later.
Others worry universities won’t respond to the caps with decreased costs. Instead, students may be pushed into the private market for loans, which often come with more predatory, expensive terms than federal loans. Some prospective students may abandon the idea of graduate school altogether, since it costs more than they are able to borrow — that’s the concern of North Carolina’s attorney general, Jeff Jackson. He’s suing over a provision in the limits he says could exacerbate the state’s health care workforce shortage.
Here are the new loan limits prospective graduate school students will face starting July 1. There are two categories of degrees, which come with different caps: professional degrees, which have a higher cap, and all other degrees, which have a lower cap. These limits are generally for new borrowers, and are not designed to impact students who are already enrolled.
- Professional degrees: Loans are capped at $50,000 annually, with a lifetime limit of $200,000.
- All other degrees: Loans are capped at $20,500 annually, with a lifetime limit of $100,000.
The Department of Education lists the following 11 fields as professional, meaning that students are “engaged in specialized training requiring exceptionally high costs of education:” medicine, law, pharmacy, dentistry, veterinary medicine, chiropractic medicine, optometry, osteopathic medicine, podiatry, theology and clinical psychology.
Absent from the list? Nursing degrees. That’s the subject of Jackson’s lawsuit. Earlier this month, Jackson joined other Democrats from 25 jurisdictions in suing over the Department of Education’s classification of what degrees count as professional. He says that definition is more narrow than the definition already given by Congress, making the Trump administration’s definition illegal.
Turning to private loans, or another career?
Under the lower loan cap, Jackson told The N&O that “fewer people will be able to afford to become nurses and healthcare workers. That’s not good for our state.”
If prospective students can only borrow $20,500 per year from the government, they may turn to the private sector to cover the difference. The cap is less than the cost of many nursing schools in North Carolina. For example, at East Carolina University’s nurse anesthesia program, tuition and fees for in-state residents come to $51,000 per year. At Wake Forest’s nurse anesthesia program, the total cost of the first year is estimated at $119,000.
“Even certified registered nurse anesthetists, who must have a four-year college degree and must complete a three-year doctoral program are now deemed not ‘professional,’” a press release about Jackson’s suit reads. “These are the nurses who deliver anesthesia in 80 percent of rural communities.”
The loan caps might be an insurmountable barrier to entry, Jackson fears.
“I think there are a lot of prospective nurses who simply will decide on another career path entirely, given that [the private loan market] is their only option now,” Jackson told The N&O.
But the Department of Education contests this, saying that their data “indicates that 95% of nursing students borrow below the annual loan limit and therefore are not affected by the new caps.”
Also absent from the professional degree classification are physician assistants, physical therapists, occupational therapists, and audiologists, Jackson points out.
As for the loan caps themselves, Jackson says “that’s a policy question for Congress,” but he “respect[s] the fact that they’re wrestling with affordability of education.”
Impact at two law schools in the Triangle
At Campbell Law School in Raleigh, dean J. Rich Leonard is concerned about the impact of the incoming caps on prospective students, even though law degrees are in the professional, higher-cap classification. The annual cost of attendance at Campbell Law is $89,000 — about $40,000 more than the new annual borrowing limit of $50,000. Leonard says 40% of his students borrowed more than $50,000 in the 2024-25 school year.
He isn’t thinking that people won’t come to law school as a result of the caps. He says he could fill a class three times over with the amount of applications the school receives. But now, he isn’t sure “how much [those prospective students] have actually dealt with the economics of how they’re going to pay for it when they get that first bill.”
Leonard worries that if accepted students turn to the private market, they might not get a great deal, considering that their credit scores or the credit scores of their parents may not be perfect, or in the case of younger students, may not even exist yet.
“I am worried about the disparate impact right on who’s going to be able to afford law school going forward,” Leonard told The N&O.
He’s thinking about partnering with North State Bank to offer a loan program to accepted students that would loan them $15,000 per year, on top of what they can still get from the federal government.
At Duke’s law school, the annual cost of attendance is $116,000 — more than double the new annual loan cap for professional degrees. William Hoye, associate dean of admissions and student affairs, is gearing up to work with accepted students to navigate the private loan market, something he hasn’t done in decades. He’s currently working on a recommended lender list.
Hoye said he can’t see this resulting in lower tuition at Duke Law School. It might inspire further fundraising to provide robust need-based grant programs, he said, but that’s about it.
The private loan market won’t necessarily be a bad thing for every student, Hoye said. The Grad PLUS program had an interest rate of around 9%, plus fees — a rate that students with good credit scores may be able to beat in the private market, he hopes.
UNC-Chapel Hill’s associate vice provost and director for scholarships and student aid, Jackie Copeland, said her office is focused on understanding how the new policy will affect incoming students across Carolina’s graduate programs. The school is committed to “refining strategies to help current students complete their degrees,” she told The N&O.
