New federal caps on graduate school loans send students and colleges scrambling

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Set us as preferred New federal rules sharply cap how much graduate students can borrow, forcing an immediate sea change in how students evaluate attaining an advanced degree, with some scrambling to pay tuition — and for colleges, prompting concerns about future access to their programs.Under the previous rules, graduate students could take out federal loans for as much as they needed to cover the cost of their master’s and doctorate degrees, including tuition and living expenses, often taking on crushing, long-term debt that contributed to a national epidemic in defaults.Effective July 1, borrowing is restricted to $20,500 annually, with a $100,000 cap.Those pursuing designated professional degrees, including law, medicine and dentistry, are limited to $50,000 a year with a $200,000 cap.The median total cost for a master’s degree in 2020 — before inflation skyrocketed — was $24,250, while professional degrees came in at $59,076, though some universities — particularly private institutions — charge far more, according to EdTrust, a nonprofit that advocates for equity in education.

The Trump administration clamped down on borrowing — part of its overhaul in the federal student loan programs — saying that the previous uncapped loans for graduate school spiraled tuition upward and the limits will encourage colleges to trim costs.Already, at least two graduate school programs in California, including the UC Irvine graduate business school, have lowered costs.But some education experts said the changes are more likely to restrict access to learning, especially for lower-income students who have trouble qualifying for or paying private loans.“It will not lock everybody out,” said Jennifer Delaney, an education finance expert at UC Berkeley.

“But there will be an inequitable lockout of folks from lower-incom...