Student Loans Slashed: Private Debt Looms

Starting in the 2026-27 academic year, a new bill will restrict federal student loan amounts, potentially pushing students toward private lenders. This change is anticipated to create a substantial funding gap for many, particularly those pursuing medical degrees. Advocates express concern that students will be compelled to take on more expensive and predatory private loan debt.

The legislation lowers the aggregate loan limit for non-professional graduate students to $100,000. While the cap for professional degrees like medicine and law was raised to $200,000, the average medical graduate will still likely need to borrow heavily from private sources. This shift could result in significantly higher repayment costs due to less favorable terms.

Experts argue that capping federal aid does not compel universities to lower tuition. Instead, it places a greater financial risk on students and families. Private loans generally lack federal forgiveness options and are associated with a higher rate of borrower complaints compared to federal loans.