States Should Step Up on Graduate School Aid (opinion)

"The question of whether colleges and universities raise their tuition prices as the availability of federal aid increases has been a hotly debated topic for more than four decades, with contradictory findings. One recent study found that institutions increased their tuition prices after the creation of Grad PLUS, and determined that the funds did not increase access (or completion) for graduate education in general or for underrepresented groups in particular."

"Now, students in master's and doctoral programs will only be able to borrow up to $20,500 annually (with a maximum of $100,000). Students in professional degree programs, like law and medicine, will have a higher cap of $50,000 annually (up to $200,000 total). Additionally, the maximum amount students can borrow from the federal government for their undergraduate and graduate studies combined is $257,500."

"The specific impact of these new limits on students is not yet known, but if we look at data for borrowers from previous years, we see potential impacts. In 2019-20, approximately 38 percent of all graduate borrowers borrowed beyond these caps, according to an analysis by Jobs for the Future. When disaggregated by degree type, 41 percent of graduate borrowers pursuing maste"

Evidence on whether federal aid leads colleges to raise tuition is mixed. Some research links government aid and higher tuition and finds Grad PLUS coincided with tuition increases and no gains in access or completion for graduate or underrepresented students, while other analyses find little tuition response among nonprofit undergraduate and certain graduate programs. Grad PLUS has been eliminated, creating new federal borrowing caps: $20,500 annually (up to $100,000) for master's and doctoral students, $50,000 annually (up to $200,000) for professional degree students, and a combined undergraduate/graduate cap of $257,500. Students exceeding these caps will need private loans, which are typically less accessible and more costly for low-income borrowers. Historic data show a substantial share of graduate borrowers exceeded these limits in 2019-20.

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