Without Grad PLUS Loans: Can You Still Afford A Professional Degree?

Lawmakers introduced Grad PLUS loans about 20 years ago to help graduate students cover education costs. Starting July 1, students will no longer be able to use these loans to pay for graduate school.

The One Big Beautiful Bill Act (OBBBA), a large spending and tax bill, ended the Grad PLUS program and also updated federal loan limits and repayment options.

Changes to Grad PLUS borrowing won’t affect all degrees the same way. Students in high-cost professional programs may face six-figure gaps but often earn more early on, while those in healthcare and service fields may face the greatest burden due to lower loan caps and moderate salaries.

Grad PLUS loans allowed students to borrow up to the full cost of attendance, including tuition and living expenses. For many, this funding was what made these degrees financially possible. Georgetown research found that 23% of students in programs costing $25,000 to $70,000 used Grad PLUS loans in 2020, and this rose to 30% in programs costing more than $70,000.

With the program ending and new federal loan caps in place, graduate and professional students will be limited in how much they can borrow:

If a program costs more than those limits, students may need private loans or other financing. Private loans often have higher interest rates and fewer borrower protections, making graduate school more financially risky.

A small group of approved “professional” degrees will retain higher federal borrowing limits under the new bill. High-cost master’s and doctoral programs that don’t qualify, such as MSW, MSN, and MPH, will face tighter caps and a higher risk of funding gaps.

While many professional degrees lead to higher-paying careers, many non-professional graduate degrees don’t immediately lead to six-figure earnings, which can make repayment more challenging.

These programs were already classified as federal “professional degrees” and had higher borrowing limits before the OBBB. Under the new law, they retain those higher limits, but borrowing is now capped rather than effectively unlimited under Grad PLUS.

These programs function like professional degrees, leading to licensed careers, but are not federally classified as such. Many relied on Grad PLUS to cover the full cost of attendance. Under the OBBBA, they will face lower borrowing caps, increasing the likelihood of funding gaps, especially given their high tuition and moderate earning potential.

These programs were never classified as federal professional degrees but could be fully funded through Grad PLUS loans. Under the OBBBA, they will also face lower borrowing limits. When tuition exceeds federal caps, students will need to cover the difference through savings, employer support, or private loans.

While all the professional and graduate degrees are affected by these changes, some are facing more serious risks than others. Traditional doctoral profession programs are losing unlimited Grad PLUS access, but these programs still have the most borrowing flexibility and maintain access to the higher federal borrowing cap.

Licensed healthcare and service professions not historically classified as “professional degrees” or being reclassified to “graduate degrees” face the greatest risk for several reasons

This is where funding gaps could be largest relative to earnings.

Several common graduate programs may cost far more than federal loan limits cover. Most graduate students can borrow up to $20,500 per year, but programs like MSW, MSN and DNP programs often exceed that amount by tens of thousands of dollars annually, according to the National Center for Education Statistics (NCES).

Under the new borrowing caps, total costs may also exceed lifetime limits. With federal borrowing for non-professional graduate programs capped around $100,000, students in these programs could face significant funding gaps, especially in high-cost fields like social work and nursing.

Students in professional programs can borrow more in federal loans than students in other graduate programs, but they can still face large funding gaps. These degrees are among the most expensive in higher education, and even the higher loan limits may not cover the full cost.

As a result, many students could be left with six-figure gaps, particularly in high-cost programs. In simple terms, the cost of these programs can exceed the new federal loan limits. The professional degrees below show where those larger funding gaps are most likely to occur.

While the professional programs above have the biggest dollar gaps, they’re not the only ones feeling the impact. In many cases, degrees with lower total price tags can actually feel harder to finance because they fall under the lower graduate borrowing caps.

So, while a $150,000 gap is eye-catching, it’s not the whole story. For many healthcare and service professionals, the real pressure comes from tighter borrowing limits paired with more moderate salaries.

The programs below are a sample of graduate degrees that typically cost less than medical or dental school. Because federal loans are capped at $20,500 per year, we estimate total federal borrowing based on the typical program length (e.g., 3 years × $20,500 = $61,500). This often leaves a significant portion of costs uncovered.

Many graduate students have traditionally relied on a stacked federal loan system to cover their full cost of attendance. They begin by borrowing direct unsubsidized loans up to the annual limit, then use Grad PLUS loans to cover remaining tuition and living expenses, up to the school’s total cost.

Grad PLUS loans weren’t extra cash to spend freely. They filled the gap between federal loan limits and the actual price of a degree. Scholarships and employer tuition assistance often cover only a small portion of costs, so federal loans make up the bulk of funding for many students.

Students generally borrow with expected earnings in mind. Some graduate degrees lead to high salaries, making repayment more manageable. Others — especially in public service or nonprofit work — pay less, which can make repaying debt harder.

Professional degree programs are among the most expensive, and even higher federal loan limits may not cover the full cost. While higher earnings can make repayment easier, significant upfront gaps may remain.

With tighter federal loan limits, students in lower-paying fields may have fewer options to cover upfront costs and could face greater difficulty repaying their loans.