EDITORS' CORNER
OPINION: Private lenders are leery of funding every college degree, underscoring why taxpayers shouldn’t be on the hook either
Private student loan vendors are skeptical of forking over the complete cost for even some Harvard University degrees – which underscores why President Trump and Congressional Republicans were right to put limits on undergraduate and graduate degrees.
Starting this year, graduate students can borrow $20,500 per year from taxpayers unless they are in a “professional” degree program, in which case they can borrow up to $50,000 per year. The Department of Education classified certain programs as “professional” such as medicine or dentistry. The new limits come from a provision in the July 2025 “One Big Beautiful Bill.” They eliminated the GradPLUS loans which previously allowed for unlimited borrowing.
Universities were predictably upset because the spigot of “free” taxpayer dollars was being shut a little bit.
“The federal government has greatly reduced Grad PLUS loans, and that means there’s really not adequate funding for students pursuing graduate degrees anymore,” Harvard University President Alan Garber told The Crimson.
And yet, his school did not find a lender who would offer full freight for every graduate degree either. Instead, private options largely replicated the new Trump limits on student loans.
One of Harvard’s “preferred lenders,” the Harvard Federal Credit Union, will offer loans to cover the full cost of the university’s medical and law school programs. (Though there are limits for international students, potentially due to the flight risk).
While the credit union says it has an annual “limit” of $126,650 for the law school, that is the full cost of attendance. The Crimson reported dental students can borrow the full amount as well.
But for the school of design, graduate students can only borrow $15,000 per year of the $100K cost of attendance.
Those differences are likely due to the expected return on investment. Students who graduate with a master’s in landscape architecture from the design school make just under $60,000 per year after graduating. Within 10 years, the earnings climb to $90K, according to a ROI database.
In contrast, Harvard law students can expect to make nearly $200K within one year of graduation and nearly half a million dollars a year within 10 years.
The credit union does not even consider loaning money to divinity school students, where graduate alumni can expect to make $32,000 after one year. The program has a negative return on investment of $800K.
College Avenue, another preferred lender, likewise advertises loans for medical, law, veterinary, MBA, and STEM degrees – but nothing for graduate degrees in gender studies or sociology.
Now as the first school year starts with the new student loan limits, evidence is mounting that the Trump administration was correct to cap what taxpayers could be on the hook for.
Even states have implicitly acknowledged Trump’s wisdom – Minnesota’s own graduate loan program has higher limits for medical degrees and also requires a credit score of at least 670 or a co-signer.
As Cato Institute expert Andrew Gillen noted to The Fix, “lots of people and states have criticized the Trump administration for eliminating GradPLUS…But none of them have simply recreated GradPLUS loans.”
