The way you pay for advanced degrees could soon look a lot different: You could borrow from and pay back the school itself.
After President Donald Trump codified sweeping student-loan repayment changes in his “big beautiful” spending legislation, colleges sprang into action. They’re offering direct lending options in response to the new borrowing caps for advanced degrees; specifically, a $100,000 lifetime borrowing cap for graduate programs, and a $200,000 lifetime cap for professional programs, like medicine and dentistry.
Only 10 programs would qualify for the “professional” designation, and borrowers, advocates, and lawmakers took issue with the exclusion of degrees, including advanced nursing. They argued that some nursing programs cost more than $100,000 and would lead borrowers to either forgo their programs or turn to the riskier private lending market.
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The legislation would also eliminate the Grad PLUS program, which allowed borrowers to borrow up to the full cost of attendance for their advanced degrees.
That’s where colleges come in. In an attempt to cover those financing gaps, some schools have announced they will create new programs to supplement the new federal caps. Washington University School of Law, for example, announced in February that it will offer a new private loan exclusively to incoming law students who “have exhausted all federal loan options.” Students can borrow up to $25,000 a year at a fixed 7.5% interest rate.
Stefanie Lindquist, the law school’s dean, told Business Insider in a statement that the new loan program “is institutionally funded and institutionally administered from beginning to end. The program is entirely in-house from entrance counseling to exit counseling all the way through repayment.”
Lindquist added that the financial aid office meets with each student to discuss responsible borrowing and repayment strategies.
Other schools have introduced similar initiatives. Yale’s School of Public Health announced in December 2025 that it would be introducing a new program that would offer “comparable, if not more competitive, loan terms compared to previous Grad PLUS loans.”
George Washington University and Duke University haven’t announced direct lending, but they are expanding their private student-loan resources; GW created a task force to provide more information to graduate students on private loan options that are competitive with the previous Grad PLUS rates, and Duke has a curated list of private lenders to help students compare their financing options.
“By expanding these resources, we’re helping students focus on their academic and professional goals without unnecessary financial uncertainty,” Michael Relf, the dean of Duke’s nursing school, said in a statement.
Education policy experts and lawmakers told Business Insider that they’re concerned about the potential influx of federal student-loan borrowers to private lending. Private student loans can have higher interest rates than federal loans, and they do not offer the same relief and repayment programs, like Public Service Loan Forgiveness.
While colleges partnering with private lenders could help students pursue their education, students run the risk of taking on more expensive debt, Carolyn Fast, director of higher education policy at the left-leaning think-tank The Century Foundation, told Business Insider.
“Students really trust their schools to provide things that are in their best interests,” Fast said. “And it raises some concerns to me that students might think that this is something other than what it is, which is potentially more expensive and riskier loans.”
Duke, Yale, and GW did not immediately respond to requests for comment from Business Insider.
An anticipated private student-loan surge
While details are minimal on how schools will roll out their private lending programs, private lenders themselves have already indicated that they’re prepared to take on more federal borrowers. During a January earnings call, Sallie Mae CEO Jonathan Witter said he’s “excited about the opportunity created by the recent federal student lending reforms.”
Navient’s CEO, David Yowan, said during the company’s earnings call that the elimination of Grad PLUS is an “opportunity” to expand this year.
Lenders have not formally announced arrangements with any colleges, and Fast said that it’s important to monitor whether those arrangements are offering fair terms and are in the best interest of students, rather than prioritizing financial gains for the colleges and lenders.
“They may be purely trying to be helpful to students in terms of giving them other options,” Fast said. Still, she added that limited federal oversight over the private student-loan industry — especially with the Trump administration’s gutting of the Consumer Financial Protection Bureau — could put students at risk.
Democratic lawmakers have previously sounded the alarm on the anticipated surge of private lending coupled with limited oversight. Sen. Elizabeth Warren and her colleagues released a report in early February that found that private lenders are already making plans to expand their loan offerings due to the federal repayment changes.
The lawmakers said that the findings “underscore an urgent need for oversight of the private lending market as these companies prepare to cash in on the Administration’s agenda.”
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