With her senior year of college now underway, Mitzie Westgate has begun planning what she’ll do after graduation next spring.
An exercise science major, she hopes to go straight to graduate school and pursue a doctorate in occupational therapy so she can open a nonprofit to help children with disabilities like her cousin, who has cerebral palsy. But thanks to unprecedented confusion around federal student loans, she can’t firm up plans or even decide where to apply until she sees how the chaos shakes out.
“It’s kind of up in the air whether I’ll be able to pay for college” after this year, said Westgate, a 21-year-old senior at the College of Charleston in South Carolina.
Tuition and other costs at her top choices — Quinnipiac University in Connecticut, the University of New Hampshire and the Medical University of South Carolina — could far outpace federal loan limits, she said. That could leave her able to afford only a single smaller university, Johnson & Wales University in her home state of Rhode Island, where she could save money by living with her parents but would graduate with fewer professional connections.
She still plans to apply for the more expensive schools and hopes that scholarships will cover some of the cost. “I’m kind of playing it by ear,” she said.
Congress last year removed dozens of graduate-level programs from the U.S. Department of Education’s list of “professional” degrees, a reclassification that set tight limits on federal loans students can borrow to pay for graduate school. Westgate’s dream program — occupational therapy — is among those that could cost students far more than they can now borrow from the federal government, leaving many wondering whether to rely on more expensive private loans to cover the remainder.
Under the Grad PLUS program, students could borrow up to the full cost of attendance. The new law, which took effect July 1, eliminated Grad PLUS and limits federal loans to $20,500 per year and $100,000 in total for most graduate programs, with higher limits of $50,000 annually and $200,000 in total for just 11 professional programs.
A lawsuit by nursing groups and other health care and educational associations led a judge to suspend the rule restricting higher limits until at least December, making it difficult for students to plan for the 2027-28 school year even as they apply for graduate school this fall.
Depending on how the pending lawsuit goes, some degrees that are now permitted the higher limits could suddenly be limited to the lower amounts, meaning students in those programs could find themselves needing more money.
They could turn to private lenders and risk higher interest rates, but some might find that path blocked, as well. Lending companies are taking a harder look at applicants than in the past, experts said, and might be unwilling to take chances on students with low credit scores or those embarking on careers known to have low earning potential.
Nearly all of the affected graduate degrees are in health care or psychology fields, such as nursing, occupational therapy and counseling programs. Divinity and ministry degrees also could be subject to lower loan limits if the government prevails in the lawsuit.
While physicians and dentists would likely earn enough eventually to pay back private loans, the outlook is murkier for graduates of some other programs. Graduates of physical therapy, psychology and social work programs, for example, could have far more trouble affording student debt, estimated the American Enterprise Institute.
Private lenders might be wary of helping students afford programs that have expensive tuition but not lucrative career earnings returns, the institute noted.
“Students attending more expensive programs do not, on average, earn substantially more after graduation,” the AEI report stated. “In these fields, higher debt often reflects higher tuition prices rather than higher returns. As a result, lenders would have far fewer incentives to offer more loans to students attending expensive private programs.”
Mark Kantrowitz, a student financial aid expert, said, “From the marketing that I’ve seen from lenders, they’re trying to target grad students who are likely to be lucrative.”
Sallie Mae, one of the nation’s largest private lenders, has cautioned that borrowing might not be the right decision.
“We will continue to maintain responsible underwriting,” said a Sallie Mae spokesperson, Rick Castellano. “But let’s also be clear: For some people, a loan is just not the answer.”
Several experts said they worry that unscrupulous lenders will target desperate students with hidden fees and hidden terms that end up costing borrowers thousands more. The risk is higher, they say, now that the Trump administration has removed many of the federal guardrails that made it harder for companies to fleece students.
“There’s a lot of different ways these loans can have traps,” said Eileen Connor, director of the Project on Predatory Student Lending, a legal organization advocating for student borrowers, including clauses that require arbitration rather than lawsuits. “And if you have bad credit, you could be looking at a 16 percent interest rate.”
Current graduate students with Grad PLUS loans are still able to borrow as much as they need, but that hasn’t stopped some from worrying about the new limits.
Kayce Cordray, 44, is in the final year of a doctoral program in nursing practice at Oral Roberts University in Oklahoma. While she is not limited by the new lending rules because she enrolled before they took effect, Cordray says the limits could irreparably harm the nursing field.
“It truly does limit the people who can complete their degrees,” she said. “We are facing a real nursing shortage and a real rural health care shortage. We’re not even going to be able to get registered nurses if we don’t have faculty. It’s a domino effect.”
The current lending uncertainty would likely have led her to make different decisions about graduate school, she said, rather than rely on costly private loans that would have taken much longer to pay off.
“If you don’t know what you’re going to be allowed to borrow, are you really going to want to commit to this program?” Cordray said. “I would probably not have chosen to do it. It would have been a significant sacrifice, one that may not have been good for my family or my children.”
A handful of wealthier universities have used their resources to offer low-interest loans to compensate for the new limits, while others have compiled preferred-lender lists to help students find reputable companies.
Some experts speculate that the new loan limits might prompt universities to lower tuition and reduce student costs. Others are doubtful.
“Right now I don’t see evidence that we’re going to see large across-the-board tuition and price reductions,” said Sarah Sattelmeyer, director of education, opportunity and mobility at the left-leaning New America, a nonprofit think tank. “We’ll see what happens.”
The more conservative-leaning American Enterprise Institute, meanwhile, noted that some universities have started reducing prices or offering scholarships and predicted that more would follow.
For example, the institute wrote, the University of Pennsylvania is charging more than students can borrow for its master’s degree in educational leadership while the same program at nearby Drexel and Temple universities costs far less.
“If the government will no longer cover the entire bill at Penn, it may lose students to its cheaper rivals,” wrote senior fellow Preston Cooper, “putting pressure on Penn to lower its prices.”
Several major universities declined to discuss the topic. The nation’s two largest systems, the California State University and State University of New York, either did not respond to or declined repeated interview requests.
Universities are navigating financial aid decisions in “a policy vacuum and with a sense of whiplash,” said Megan Walter, a senior policy analyst at the National Association of Student Financial Aid Administrators, adding that the situation has left aid directors confused about what to tell students. “We just want to see this ended so students and schools know what to do,” she said.
The uncertainty has caused ripple effects that could last years.
Gracie Hayworth, 23, started an online master’s of public health program at Dartmouth College shortly before the new limits took effect. While her current loans have not been affected, her family’s future has.
She and her husband, who live in Texas, both plan to pursue doctorates, but the potential loan limits have them rethinking their strategy. Federal loans usually allow borrowers to finish school before paying them back, but private loans often require students to start repayment while the student is enrolled in graduate school.
“We were sitting at the kitchen table deciding whether we can make this work,” Hayworth said. “When my husband gets his Ph.D, we’ll have to sit down and seriously think about that. If he has to pay those loans while he’s still in school, that adds another barrier.”
Many nursing students are mothers who must support their families while attending school, said Cordray, the Oral Roberts student. Even without the new loan limits, some of her classmates have been forced to drop out of the rigorous program, she said.
“We are allowed to work, but that’s not realistic. We can’t realistically be in two places at once,” said Cordray, who has five children. “If you’re trying to work full time for your family for three years, guess who doesn’t see you: your children.”
This story about federal loan limits was produced by The Hechinger Report, a nonprofit, independent news organization focused on inequality and innovation in education. Sign up for the Hechinger newsletter.
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