The Hidden Cost of the Big Beautiful Bill: A Blow to Grad Student Loans and College Access

Art by Okyu Derin Ersoy

As lawmakers celebrate the sweeping reforms in the so-called “Big Beautiful Bill,” one provision is drawing quiet concern among educators, students, and policy analysts: changes to federal graduate student loan programs. 

Grad PLUS loans are federal loans that allow graduate and professional students to borrow up to the full cost of attendance, covering not just tuition but also housing, books, and other essential expenses. Unlike many private loans, they offer relatively low fixed interest rates, flexible repayment options, and access to federal forgiveness programs.

According to data reported by Bloomberg Law, around 440,000 graduate students used Grad PLUS loans in a recent year, borrowing a total of $14 billion. For many students, the amount borrowed through Grad PLUS averages nearly $32,000 per year, a critical source of funding that will now be harder to obtain.

Students attending minority-serving institutions are among those most likely to be affected. About 1 in 5 schools where students borrow through Grad PLUS are designated as minority-serving, suggesting that students of color and first-generation college students could disproportionately bear the brunt of these cuts.

This concern is echoed by national research organizations, including the Student Borrower Protection Center, which warns that many students may now be forced to turn to private loans which typically offer fewer protections and higher interest rates.

The bill also tightens rules around IDR plans, which allow borrowers to make payments based on their income and eventually have the remaining balance forgiven after 20 to 25 years. Under the new legislation the income threshold for payment calculations is lowered.  Higher monthly payments for many graduate borrowers and for some, the loss of a pathway to long-term debt relief.

According to a Congressional Budget Office report, graduate loans make up about 50% of total federal loan volume but account for 81% of the total amount expected to be forgiven under IDR plans. With forgiveness now more difficult to reach, the long-term burden on graduate borrowers could become overwhelming.

Low-income and underrepresented students may be discouraged from pursuing advanced degrees due to higher up-front costs and fewer financial safety nets. Without federal protections, students may end up in riskier private loans, less flexibility in times of financial hardship. Students may feel pressured to choose higher-paying careers over public service or research jobs just to manage their debt. Draining talent 

from service fields. 

College programs may see enrollment declines in disciplines with high costs or lower initial payoffs. Students may request more institutional aid or take longer to complete their degrees due to financial strain. Demographic diversity in graduate education could regress if access becomes more tightly linked to personal wealth. Future professionals can't afford the degrees required.

Student advocacy groups across the country are already mobilizing, pushing for reconsideration of the bill’s education provisions. Experts from the Council of Graduate Schools and Pew Research Center are calling on lawmakers to preserve access to affordable federal loans for graduate students. Monitoring the impact on underrepresented students and implementing equity safeguards.

In longevity, making graduate education more expensive and harder to repay risks undermining the very innovation, and talent that will be needed to sustain the economy. The cost of this bill extends far beyond the federal budget; it will be students who pay for it.

Sasha Guobadia