The Indicator from Planet Money Will new loan limits lower the cost of grad school?
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Dec 16, 2025 New federal loan caps for grad students could reshape the higher education landscape. The change aims to ease financial burdens, but hosts debate whether it will truly lower tuition or just slow increases. Insights reveal troubling impacts on lower-income and Black students. Critics argue that past unlimited loans fueled price hikes dollar-for-dollar. Medical schools voice concerns that even higher caps may keep education out of reach. Will these limits pave the way for more equitable access to graduate programs?
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Grad Plus Fueled Rising Grad Tuition
- Grad Plus allowed graduate students to borrow broadly for living costs and drove most recent growth in graduate debt.
- Leslie Turner found each dollar of federal borrowing raised sticker price by about one dollar and net price by $0.60–$0.65.
Policy Shift Ended Generous Grad Loans
- The Trump administration eliminated the Grad Plus program for new borrowers, arguing it incentivized tuition hikes and high debt.
- Critics linked Grad Plus generosity to schools treating federal loans as a cash source.
Don’t Expect Immediate Big Tuition Cuts
- Expect tuition cuts to appear slowly rather than in immediate nominal price drops.
- Watch for institutions to slow future price growth rather than slash current sticker prices.