Finalized student loan limits will impact law students, law schools and the legal profession
Regulations that limit the amount of federal loans available to “professional” advanced degrees such as law were finalized Thursday by the U.S. Department of Education, potentially limiting access to legal education in ways that could impact law students, law schools and the legal profession.
As part of the One Big Beautiful Bill Act, Grad PLUS loans, which have no borrowing limits, will be eliminated. And unsubsidized federal loans to law students now are capped at $50,000 per year and $200,000 total for graduate education. Average law school total costs have hit $230,163, according to a July 2025 blog post by Juris Education.
These changes now leave some law students scrambling to make up the difference via private loans, often with higher rates and limited repayment options—if they qualify.
“Not all students will qualify for these private education loans and may face significant funding gaps,” wrote Gisele Joachim, the vice president for law school engagement at the Law School Admission Council, to the ABA Journal.
As students determine their eligibility and options, “time is of the essence,” says Nancy Conneely, the vice president of policy at the AccessLex Institute, as they try to find a creditworthy co-signer; reach out to potential lenders sooner, rather than later; to find out what they qualify for; and consider state-based lenders in their states that may have lower interest rates or fees.
“First-generation students and low-income students who don’t have financial support will be most at risk of not being able to attend law school,” Conneely wrote to the Journal. “Aspiring students with poor—or no—credit history will struggle to get a private loan with favorable terms. Those that can’t secure a co-signer may not be able to get a loan at all.”
Nearly 40% of students whose loans exceed the new limits “may not be able to secure private loans without a co-signer under existing underwriting standards,” according to a December 2025 study by the Federal Reserve Bank of Philadelphia.
Joachim notes that the published final rule differs from what came out of the negotiated rulemaking sessions late last year, including a clarification that prior Federal Direct Graduate PLUS loans will be included in a student’s lifetime maximum aggregate limit, now set at $257,500 for professional students.
“Students who have previously borrowed towards a graduate or professional degree may find themselves with limited access to federal student loans if they decide to pursue a law degree in the future,” Joachim says.
Law schools will also feel the impact.
“Law schools may face financial issues as they try to help fill the gap for students in a time of already tight budgets,” Conneely adds.
Admissions officers must shift focus, too, says Jennifer Schott, the vice president at the AccessLex Center for Education and Financial Capability at the AccessLex Institute.
“The priority now is transparency: helping students understand the true cost of attendance, their federal borrowing limits, and the range of scholarships and other resources available to them,” Schott says.
The true impact on matriculation rates remains unknown.
“We do not yet know how this will affect incoming class numbers,” Joachim says.
To head off issues, some law schools are offering new financial aid options for their students.
In February, the Washington University School of Law in St. Louis launched a supplemental private loan up to $25,000 per year with a 7.5% fixed interest rate for incoming JD students who are U.S. citizens and have exhausted all federal loan obligations.
To help its students meet $50,000 limits for federal loans, the Santa Clara University School of Law in Santa Clara, California, now guarantees all incoming students who put down a deposit by April 15 a $16,000 scholarship that won’t interfere with eligibility for other scholarships.
And the University of Kansas School of Law in Lawrence, Kansas, created a partnership with the university’s endowment to create the J-HELPS Loan Program to finance amounts over the federal loan limits up to $12,000 per year through a 5% interest loan that doesn’t require a co-signer.
In the long term, the profession will change, too, Conneely says, as the increase in private loans that often are not eligible for public service loan forgiveness could lead fewer graduates to go head into those lower-paying jobs.
“This will have a ripple effect on communities that already struggle to access affordable legal representation,” Conneely says.
Inside Higher Ed also had coverage.
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