By Mark Huelsman and Aissa Canchola Bañez | April 25, 2025
In the coming weeks, House Republicans are expected to unveil and debate the contents of their budget reconciliation package, which is set to include massive cuts to many critical domestic programs, including major aspects of the student loan safety net, while delivering upwards of $4.5 trillion in tax relief for billionaires and big corporations.
Specifically, the House recently passed a budget resolution directing the Committee on Education and Workforce to find $330 billion in budgetary savings. While we await specific bill language, these savings will likely come from spending cuts outlined in a leaked 51-page menu of options being considered by the House GOP. These proposals include eviscerating income-driven repayment programs such as the SAVE plan, slashing Public Service Loan Forgiveness (PSLF), repealing student and borrower protections such as Gainful Employment and Borrower Defense to Repayment, ending interest subsidies for currently-enrolled students, and capping Pell Grants to many low-income students.
Congressional Republicans want to make it harder for their own constituents to afford graduate education and compete in today’s job market.
One particular program, Direct PLUS loans to graduate students (or Grad PLUS loans), has been marked for potential elimination altogether—which, without making graduate school more affordable or expanding other areas of the federal student loan safety net, will deprive future students of a key federal financing tool to pursue their dreams of graduate education. Ending Grad PLUS loans has been a long-standing goal for right-wing lawmakers, and is a key proposal of Project 2025’s roadmap toward “privatizing all lending programs, including subsidized, unsubsidized, and PLUS loans.” In the context of the relentless assault on student borrowers, higher education, and the social safety net, eliminating Grad PLUS would substantially harm student access to graduate and professional degree programs, and subject millions of future borrowers to an unregulated and predatory private student loan market, while doing little to reduce overall student debt and the need to borrow.
In particular, eliminating the program would send shockwaves throughout communities across the nation—including constituents represented by the very Members of Congress serving on the House Education and Workforce Committee who are taking the lead on making these major cuts.
An analysis of federal student aid data shows that, among members of the committee, over 36,650 borrowers across their districts have relied on more than $860 million in Grad PLUS loans to finance their graduate education, shedding a glimpse on how many people rely on this program to finance graduate and professional degrees.
“In particular, eliminating the program would send shockwaves throughout communities across the nation—including constituents represented by the very Members of Congress serving on the House Education and Workforce Committee who are taking the lead on making these major cuts.”
Across the country, 1.8 million borrowers have had to rely on Grad PLUS loans precisely because the limits of unsubsidized loans are largely insufficient to finance the cost of a graduate degree (and because the aggregate limit for subsidized and unsubsidized loans includes loans borrowed for undergrad). By ending Grad PLUS without comparable investments that ensure that graduate and professional students have more affordable degree pathways, students will have to come up with tens of thousands of dollars in alternate forms of credit. The idea that market forces will simply bring down the total price that students must pay to finance their education has been largely disproven. Without ensuring students don’t need to take on the amount of debt they currently do, ending this program will simply make student debt more punitive and complicated.
Consider that the average Grad PLUS borrower graduates with over $57,000 in Grad PLUS debt, and for degree-holders who rely on Grad PLUS, it makes up nearly half (47%) of the typical graduate borrower’s loan package.1 And despite substantial attention paid to those in law and medicine programs, students in Master’s programs in many fields, including STEM, must rely heavily on Grad PLUS as well. In fact, over one-in-five (22%) borrowers graduating with a Master’s degree must take on Grad PLUS loans, and over a quarter of STEM graduates rely on Grad PLUS. For policymakers who are constantly harping on the need for more STEM degrees, this should be a warning sign.
The justifications typically provided for ending, or capping, Grad PLUS loans often blame the program’s lack of annual or aggregate loan limits for exceedingly high cost and debt taken on by graduate borrowers. But like so much of our higher education financing system, graduate borrowing is a reflection of longstanding wealth inequities and labor market discrimination. Black, Latino/a, and female borrowers often take on greater debt for lower payoff in the labor market for both undergraduate and graduate degrees. Across every degree or discipline, from science and engineering, business, education, and the humanities, female graduates typically earn 75 cents for every dollar earned by men, and Black and Latino/a graduates earn 80 cents for every dollar earned by a white college graduate with the same degree.
A handful of proposals have recently called for reforms to Grad PLUS as a part of a larger suite of ideas that provide funding for less-wealthy students and institutions and enhance consumer protections across both federal and private lending. To be clear, this is not the current agenda offered by House Republicans, nor does it reflect the reality of the Trump Administration’s first 100 days.
Gutting Grad PLUS will push millions of students and families into the fangs of an underregulated and risky private market.
It is impossible to discuss right-wing policymakers’ goals to end Grad PLUS without contextualizing it within two larger developments: the illegal, chaotic, and ongoing decimation of the Consumer Financial Protection Bureau, the watchdog charged with overseeing the sprawling private student loan industry, as well as massive cuts to public benefits, higher education, and other programs that will reduce support and increase costs for working families and students, including those hoping to pursue graduate school.
First, sunsetting Grad PLUS would remove key protections for graduate borrowers, including access to Income-Driven Repayment, PSLF, and other safeguards should a borrower fall behind or become permanently disabled, while simultaneously limiting access to students from low-income and marginalized backgrounds who would simply be denied financing by private lenders. It would expose potentially millions to a now-completely underregulated private market with a long and consistent history of abusive and deceptive practices that generally offers less affordable and more risky options than federal loans.
Indeed, there is evidence that Grad PLUS acts as a crucial substitute for private loans: an analysis of federal data shows that among borrowers who received their graduate degree in 2020, less than 4 percent of Grad PLUS borrowers took out private loans, compared to 15% of those who did not take out Grad PLUS loans.2
Efforts to end Grad PLUS loans come amidst unprecedented attacks on students, families, and institutions of higher education.
In addition to the decimation of student loan safety net programs, the House is attempting to cut $880 billion from Medicaid over the next 10 years, which, in addition to the cruelty inflicted on low-income families, would have catastrophic consequences on state budgets. States facing extreme budget shortfalls would face a series of terrible options, notably cutting higher education, which represents one of the largest discretionary portions of state budgets and which is often offset through increases to tuition, fees, and the cost of both undergraduate and graduate education. The magnitude of these proposed cuts is almost impossible to overstate: one analysis found that the House’s proposed Medicaid cuts represent 19% of overall state education spending, so plugging the massive Medicaid hole could come from Great Recession-level higher education budget cuts.
On top of Medicaid, House lawmakers have repeatedly floated deep and destructive eligibility and benefit cuts to other safety net programs like the Supplemental Nutrition Assistance Program, making life harder for the 1-in-8 graduate students who experience food insecurity.
Needless to say, this does not amount to an agenda focused on lowering costs for students and families, helping them achieve their professional dreams, and meeting the needs of the 21st-century workforce. Instead of ending Grad PLUS, policymakers should be investing in programs that serve high numbers of vulnerable and marginalized students, especially those offered by public colleges and universities, while substantially reducing the need to borrow at all in fields that provide social goods and often require postbaccalaureate degrees, including teaching, social work, counseling, nursing, and public interest jobs. By funding public institutions so they’re not on a constant chase for revenue, Congress could reduce the need for Grad PLUS borrowing among the very students most likely to struggle to repay.
Protecting graduate borrowers would also necessitate oversight of the private student loan market, and ensure that borrowers aren’t trapped by companies, or even institutions themselves, offering creative and misleading schemes that resemble little more than predatory loans. It would also mean ensuring borrowers have access to the loan repayment, cancellation, and other tools that they are entitled to under the law, rather than blocking access to affordable payments, weaponizing and politicizing loan forgiveness for public service workers, and decimating the agencies charged with administering their student aid.
At a time when families are financially squeezed from every angle, and when deep economic uncertainty is forcing millions of workers to rethink their future educational dreams, Americans deserve a real agenda for reducing the cost of higher education, particularly graduate education. Simply slashing programs that give borrowers a last resort at financing those dreams is unserious and destructive.
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Mark Huelsman is a Student Loan Justice Fellow at the Student Borrower Protection Center (SBPC).
Aissa Canchola Bañez is the Policy Director at SBPC. Previously, Aissa led outreach and engagement efforts for the Office for Students and Young Consumers at the Consumer Financial Protection Bureau.
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