Trump's Student Loan Changes May Push Borrowers into Risky Private Loans
So, there’s been a major shake-up in the world of student loans — and it could impact anyone planning to go to grad school, med school, or law school in the next few years. President Donald Trump’s recent domestic policy law includes a sweeping overhaul of how federal student loans work, and the ripple effects are already being felt.
At the heart of this change is the elimination of the Grad PLUS loan program starting July 1, 2026. This program has, since 2006, allowed students to borrow the full cost of attending graduate or professional school directly from the federal government. With that going away, future grad students will face strict borrowing caps: $50,000 per year, with a $200,000 lifetime limit. And if you’re already stressing about loans, those caps won’t go far — especially when some private law schools charge nearly $60,000 a year just for tuition.
This change means that a lot of students might no longer be able to rely on federal aid alone and will have to turn to private lenders. That’s raising red flags for many Democratic lawmakers. Senators Elizabeth Warren, Bernie Sanders, and Ron Wyden are already pushing back, warning that this could flood the private lending market — which tends to come with higher interest rates, less borrower protection, and in many cases, riskier repayment terms.
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Letters have been sent to major private lenders like SoFi, Navient, Sallie Mae, and Nelnet, asking them how they’re preparing for this potential surge in borrowers. Lawmakers are also asking what protections will be in place for students who fall into default or who’ve been misled by predatory schools — an issue that’s been seen before in the private lending space.
The big concern is that once a borrower moves out of the federal system, they lose access to programs like Public Service Loan Forgiveness or borrower defense to repayment — tools that can help people recover if they’re defrauded or fall on hard times.
For students like Dalea Tran, a 19-year-old from San Diego dreaming of law school, the new reality is daunting. Without Grad PLUS loans, affording grad school may no longer be possible — or may require choosing a less expensive, possibly less prestigious path. And for med students in rural areas or pursuing primary care, where loan forgiveness often plays a key role, this change could shift career decisions entirely.
Ultimately, while some conservatives argue these caps could help curb rising tuition costs, the burden seems poised to fall hardest on students who aren’t wealthy enough to pay out of pocket and don’t have the credit to qualify for private loans.
So, the question now is: who’s going to be left out — and what does the future of graduate education look like when federal support fades away?
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