June 12, 2019

AccessLex Institute’s New Report Shows Impact of Restricting Grad PLUS Loans

Research and Data


Student loan debt has received much attention over the past several years from the media, scholars and policymakers, leading some to question the efficacy and value of certain federal loans and argue that the private sector is better equipped to provide financing for graduate education.

Following up on its recent report refuting criticisms of the Grad PLUS Loan program, AccessLex Institute released the second report in its two-part series, Examining Graduate Lending: Access vs. Private Lending, which uses federal data to show who would be harmed by policy changes to cap or eliminate federal lending to graduate and professional students. We show in this report that the private sector would be an inadequate substitute for the current federal investment in graduate education.

Key takeaways from this report include:

  • Changes to programs that would negatively impact and target graduate and professional students (e.g., further limiting or eliminating Grad PLUS, increasing repayment amounts or time to forgiveness, etc.) would be ill-advised because these students are, by far, the best performing cohort of borrowers in the federal student loan portfolio.
  • Private student loan lending is an inadequate substitute for the access-driven investment from the federal government in advanced education.
  • Black borrowers and Historically Black Colleges and Universities would likely be the most substantially harmed by privatization of graduate lending because of the difficulty many students would have obtaining privately-financed credit under traditional underwriting standards.
  • Severely limiting or eliminating federal graduate lending should not be used as an end-run around difficult-to-construct accountability systems because doing so would unnecessarily punish students.

As Congress deliberates the value of advanced education through reauthorization of the Higher Education Act, it is critical that it is armed with complete and accurate context, data and potential effects of proposed policy changes. Proposals designed to have the federal government retreat from providing loans to those seeking graduate and professional degrees are misguided at best, and if implemented, would substantially hinder access to advanced education for those who need it most.

You can read the first report in the series, Examining Grad PLUS: Value and Cost.