How Graduate Students Can Adjust to Grad Plus Loan News

Student loans are a hot topic these days, and for good reason. There have been massive shake ups in education under the Trump administration, from the proposed dissolution of the U.S. Department of Education to sweeping changes to how student loans could be administered and managed in the future.

The potential impact of these proposed changes is not limited to undergrads and future college students and their families. With the cost of a master’s degree averaging between $44,000 to $71,000, many graduate students also rely on federal student aid, such as Grad PLUS loans, to fund their continuing education.

If you’re a grad student, you’re probably wondering how these changes might impact your future and your ability to pay for graduate school. Let’s walk through the potential changes and explore some alternative financial aid options, should Grad PLUS loans become unavailable.

Key Takeaways

• Grad PLUS loans are a type of federal loan offered by the U.S. Department of Education that can cover up to the full cost of attending graduate school.
• Republican lawmakers have proposed changes to the federal student loan programs that administer graduate loans, including reduced caps on unsubsidized loans and eliminating Grad PLUS loans altogether.
• If these proposed changes become law, current graduate students will likely be grandfathered in, but future graduate students may need to seek alternative sources of financial aid.
• Scholarships, fellowships, need-based grants, graduate assistantships, work-study programs, federal unsubsidized loans, and private student loans are alternative funding options graduate students can consider.  

What Are Grad PLUS Loans?

Grad PLUS loans are a type of Direct PLUS loan specifically for eligible graduate and professional students. These credit-based federal loans are offered by the U.S. Department of Education and allow students to borrow up to the full cost of attendance (graduate tuition, fees, and living expenses) minus any other financial aid received. They come with a fixed interest rate and borrower protections, and they’re a popular option because federal unsubsidized loans often don’t cover the full cost of advanced degrees.

According to recent federal data, Grad PLUS loans account for a significant portion of graduate student debt. As many as 1.8 million borrowers hold these loans, totaling up to $117.2 billion. This has caught the attention of some policymakers, who are starting to take a closer look at these loans.

The high borrowing limits and growing debt load have sparked increased scrutiny of Grad PLUS loans, especially as discussions around the student loan crisis and reforms have intensified. Policymakers are raising the possibility of reform—or even elimination—as ways to reduce the overall burden of graduate-level debt.

Will the Grad PLUS Loan Program be Cut?

Discussions around eliminating the Grad PLUS loan program have gained traction on Capitol Hill, especially among Republican lawmakers who want to rein in federal spending on graduate education. These lawmakers argue that unlimited borrowing under the program inflates the cost of graduate degrees and places an undue debt burden on students. They’ve introduced bills such as the College Cost Reduction Act of 2024, which proposed eliminating Direct PLUS loans. While it didn’t pass, similar themes in legislation have been introduced in 2025.

The Graduate Opportunity and Affordable Loans Act, introduced by Alabama Senator Tommy Tuberville in January 2025, proposes to eliminate the ability of graduate and professional students to receive Direct PLUS loans and sets the aggregate limit on unsubsidized loans to $65,000 for a graduate student. While the bill was referred to the Committee on Health, Education, Labor, and Pensions, it has yet to proceed.

Even though neither bill targeting Grad PLUS loans has passed, they each signal lawmakers’ appetite for reforming graduate lending. That means potential changes to how students finance advanced degrees. 

What Grad PLUS Loan News Means for Borrowers

As policymakers debate the future of federal student aid, Grad PLUS loans are undeniably on the chopping block. For current and prospective graduate students, that adds another layer of uncertainty to an already stressful financial climate. Rising tuition costs and fewer affordable borrowing options could leave many students scrambling to cover expenses. 

Finding student loans for graduate school, including from private lenders, will become more necessary for students who’ve exhausted free financial aid options. 

Current Grad PLUS Borrowers

Students already enrolled or recent graduates with active Grad PLUS loans probably won’t see major changes, at least in the short term. If Congress eliminates the program, existing borrowers will likely be “grandfathered” in, meaning they can keep their current loans and repayment terms as they are. The uncertainty around the Grad PLUS loan 2024-2025 cycle could complicate financial planning for those midway through multi-year programs.

If you’re in either of these groups, pay close attention to Grad PLUS loan news developments and start researching backup funding strategies in case future borrowing under Grad PLUS is capped or phased out.

Future Grad PLUS Borrowers

Future graduate students might be at bigger risk of losing out on Grad PLUS funding. If this federal loan program is eliminated, students may need to rely more heavily on private loans to finance their education. While private loans are just as effective at funding advanced degrees and may offer additional benefits like access to career readiness tools, they may also come with tighter credit requirements, variable interest rates, and other considerations—so it is important to compare your options.

This shift from federal to private loans could disproportionately impact students with limited or poor credit histories. As a result, some may delay graduate studies, choose lower-cost institutions, or seek employer-sponsored education benefits. Others may turn to part-time enrollment or work full-time when studying, lengthening the time needed to complete a degree.

If you’re thinking about attending grad school, now is the time to start preparing:

• Compare graduate program costs and consider how you might pay for your desired program if Grad PLUS loans go away.
• Research and apply for graduate scholarships, fellowships, and other grants. To do so, you’ll need to complete the Free Application for Federal Student Aid (FAFSA) every year.
• Apply for graduate assistantships or federal work-study programs. Availability of these programs may impact your school choice. 
• Look into employer education benefits to help cover the cost of graduate school. 
• Take steps to build a strong credit profile, research private loan terms, and prepare to borrow if you still need to cover costs.

Ascent Is Here to Help

We know that paying for grad school is an important concern for all students, and that Grad PLUS loans have been a vital resource. Even if they go away, however, there are still options. Try to be selective about your desired program, pursue all your options for free financial aid, and take your time comparing lenders for private student loans. 

Ascent can help you find the right loan terms and interest rate to support your graduate education, but we’re here for you beyond borrowing. Our resources for students and families offer guidance about paying for school, better budgeting, career-readiness, and more. Amid ongoing student loan changes, Ascent remains committed to empowering student success and financial wellness. 

FAQs

What alternative loan options are available if the Grad PLUS ends?

If Grad PLUS loans are phased out, future graduate students should first explore financial aid that doesn’t need to be repaid such as scholarships, fellowships, grants, graduate assistantships, work-study programs, and employer tuition reimbursement programs. If there are any gaps in funding, graduate students should consider federal unsubsidized loans and private student loans.

Can private student loans cover the full cost of grad school?

In many cases, private student loans can cover the full cost of attending graduate school, from tuition and fees to living expenses. Private loans have unique eligibility and loan limits determined by the lender, and they usually depend on your credit history or income. That makes planning and comparing loans from different providers a necessity.

Will Grad PLUS loans be forgiven?

Grad PLUS loans may be eligible for forgiveness under existing federal programs like the Public Service Loan Forgiveness (PSLF) or Income-Driven Repayment (IDR) plan forgiveness, provided you meet the necessary qualifications. However, there’s no separate forgiveness initiative specifically for Grad PLUS loans at this time.