How Schools Can Rethink Graduate Funding Models After Grad PLUS
Key Takeaways
- Grad PLUS loans are ending in 2026, but schools have a real opportunity to rethink how they support students.
- High-cost programs face funding gaps, creating space for creative solutions that help students afford their degrees.
- Graduate students already carry significant debt,
- Institutions can innovate by combining scholarships, alternative financing, and partnerships with private lenders.
Graduate funding is changing fast, and schools have an opportunity to rethink how they support students. With the end of Grad PLUS loans under the One Big Beautiful Bill (OBBB) Act, institutions will need to explore new ways to help students cover the cost of high-cost programs like law, medicine, and business. These shifts open space for innovation, helping schools expand access and showcase the value of their programs.
Why Does this Funding Gap Matter for Your Institution?
Graduate students already carry significant debt, and tighter federal limits will make funding high-cost programs even harder. In 2025, the Federal Reserve reported that total student loan debt in the U.S. reached $1.77 trillion, with graduate students accounting for nearly half. Only 16% of graduate students relied on Grad PLUS loans, yet these loans accounted for 32% of all federal graduate lending. The elimination of these loans leaves a substantial gap in graduate funding models.
High-cost graduate programs, such as law, medicine, and business, are especially affected. These programs often carry tuition and fees that far exceed federal loan limits, and students frequently rely on layered financing, including Grad PLUS loans, to cover living expenses and program costs.
For schools, this shortfall could translate into fewer enrollments—particularly among underrepresented groups—potential revenue losses, and pressures on program offerings.
However, this change also creates an opportunity: institutions can explore creative strategies that help students bridge funding gaps while highlighting the strength and value of their programs.
How Schools Can Innovate in Response to Grad PLUS Loans Ending
While Grad PLUS loans are ending, the future of graduate funding is full of possibility. Here are some approaches institutions are exploring to navigate these shifts effectively:
1. Hybrid Funding Models
One option institutions can explore is hybrid funding models that combine university resources with external funding sources in creative and flexible ways. These approaches allow students to access multiple streams of support, making high-cost programs more manageable and reducing reliance on a single type of funding.
2. Institutional Support
Colleges and universities are taking a fresh look at how they support graduate students, exploring approaches that go beyond traditional models. These strategies aim to make funding more transparent, flexible, and responsive to student needs.
Some schools are using data to identify where gaps are largest, allowing them to direct scholarships, grants, and other resources where they’ll have the most impact. Others are rethinking program and tuition design, experimenting with modular coursework, interdisciplinary tracks, or flexible tuition schedules that let students progress at their own pace.
By layering these approaches, students can combine multiple forms of support —like targeted funding, assistantships, federal loans, or flexible tuition options—into a plan that works for their unique situation.
3. Partnerships with Private Lenders
As the role of private funding in graduate education expands, higher education leaders are considering how thoughtful collaboration with private lenders can support students in navigating these changes.
For example, here’s how a partnership with a private lender could work:
- Customized loan programs designed to fit specific graduate populations or high-cost programs.
- Streamlined certification processes that simplify access for both students and financial aid offices.
- Cosigner flexibility, allowing students to qualify with or without a cosigner or features such as an early cosigner release.
- Flexible features such as varied repayment schedules and multiple repayment pathways, low or no origination fees, or interest-only options while enrolled.
- Competitive fixed and variable rates to give students more choice and affordability.
- Online tools and resources—including blogs, webinars, and financial calculators—to help students plan, budget, and make informed decisions.
- Alignment with institutional goals so programs reflect your school’s values and support student success.
- Comprehensive support programs that extend beyond basic loan offerings, such as career readiness and financial wellness resources, career planning workshops, and access to internship opportunities. For example, Ascent Funding offers its borrowers access to paid, remote internship opportunities, personalized coaching, and school-to-career readiness tools to help students graduate on time, launch successful careers, and achieve durable economic mobility.
The goal is simple: give students ways to finance their education that are manageable, understandable, and tailored to the programs they’re pursuing.
The Bottom Line
The end of Grad PLUS represents a major shift, but also a moment of opportunity. Schools that embrace innovation now can strengthen their programs, expand access, and demonstrate leadership in a changing funding system.
About Ascent
Ascent is a mission-driven fintech company committed to redefining student lending through a focus on access, affordability, and lasting economic impact. Backed by institutional capital, we offer innovative loan options for college and career training programs—helping more students qualify, with or without a cosigner. But funding is just the start. From career readiness tools to financial wellness resources to over $355,000 in no-essay scholarships, everything we build is designed to turn education into real opportunity. Learn more about how we’re working to increase student income by $10 billion by 2028 in our Impact Report.
