Empowering Tomorrow's Leaders: Why We Must Defend Graduate Student Loans

Graduate loans play a critical role in expanding access to higher education by providing essential financial support to students pursuing advanced degrees. Without them, many individuals – particularly from low-income and underrepresented backgrounds – would be forced to forgo their academic dreams due to having no alternative to finance their degrees. Still, as the cost of a graduate education rises, policymakers have advocated for a reduction or outright elimination of graduate funding as a means of combating high levels of student debt. However, as Accesslex Institute’s new video on graduate loan capping explains, cutting off this funding could have far-reaching consequences.

Over the years, a number of federal bills have included provisions that would end the Grad PLUS Loan program – a federal loan program available to graduate and professional students – or reduce graduate funding so low that law school, medical school, and other graduate programs would be out of the question for many. On the surface, these options may seem like reasonable solutions, but reducing or eliminating financing for graduate and professional students as a cost-saving measure raises significant concerns about the impact this would have on access for students, particularly those from low-income or underrepresented backgrounds. According to data from the National Postsecondary Student Aid Study, the greatest harm would be felt by Black graduate students, 80 percent of whom relied on federal student loans to finance their graduate education in 2016 compared to 57 percent of White graduate students.

Many advocates in favor of reducing or eliminating graduate funding point to the private market to fill the gaps. However, it’s unclear how the private market would be able to generate the capital necessary to support the risk attached to such an access-driven pool of borrowers. Additionally, the private market comes with its own set of challenges and limitations. Private loans often have higher interest rates, less flexible repayment options, and stricter eligibility criteria, making them inaccessible to many students, especially those with lower incomes or bad credit. Relying solely on the private market would also exacerbate issues of equity, as only students with significant financial resources would be able to afford a graduate education.

Instead of eliminating or cutting graduate funding, policymakers should focus on targeted solutions that truly lower the cost of higher education while maintaining access for all. AccessLex supports the following solutions:

• Providing student borrowers with a low interest rate on all federal student loans,
• Eliminating origination fees on all federal student loans,
• Reinstating eligibility for subsidized Stafford Loans for graduate and professional students, and
• Allowing graduate and professional students to use any remaining Pell Grant amount for graduate or professional school.

These measures would ensure that a graduate or professional degree is affordable for borrowers while also maintaining access and cultivating a more inclusive and diverse pool of professionals. Rather than resorting to drastic cuts, policymakers should work towards sustainable solutions that help ease the burden of student debt without sacrificing the investment in higher education promised by the Higher Education Act.

Check out some of AccessLex Institute’s relevant advocacy resources