How OBBBA’s Student Loan Caps Could Reshape Law School Affordability and Access

The One Big Beautiful Bill Act (OBBBA) will effectively cap federal student loans at $150,000 for law students, a population that depends heavily on borrowing to fund their professional education. Although the bill establishes a $200,000 lifetime borrowing limit for professional programs, annual borrowing will be limited to $50,000 per year, with prorated caps for part-time attendance.

This makes the annual $50,000 limit particularly restrictive for J.D. programs because 1) the average annual tuition and fees at private law schools, which account for more than half of U.S. law schools, exceed $50,000, and 2) three-quarters of all law students borrow to fund their degree, compared to 59% of other graduate and professional students. The policy will thus fundamentally reshape the current law school loan landscape, where students borrowed $150,400, on average, as of 2020.

Initial Outlook and Analysis

We offer a conservative picture of the policy’s reach and its implications for affordability and access, using data from the U.S. Department of Education. The most recent data includes median federal loan amount and total borrowers by degree program for the pooled graduating cohorts of 2018-19 and 2019-20. We examine the real median loan amounts for the pooled J.D. classes of AY2018-19 and AY2019-20 against a $150,000 borrowing limit in 2025 dollars.

We find that 72 (39%) of the 183 operational ABA-approved law schools with usable College Scorecard data reported a real median loan debt amount greater than $150,000. Since this represents the median debt amount, we can infer that half the students at these schools graduated with loan debt exceeding the median. The sum of those students compared to the total number of borrowers suggests that at least one in four borrowers took out more than $150,000 in federal student loans to pay for their legal education. As we detail below, however, the true proportion is almost certainly higher. Had they been subject to OBBBA, these borrowers would have needed to use other resources, such as private loans, to make up the difference.

Weighted Impact of Loan Limits

By extension, because students who received Pell Grants as undergraduates rely more heavily on financial aid, the caps will disproportionately affect J.D. students from these backgrounds, many of whom are first-generation students or students of color. Among those who received Pell Grants as undergraduates, 31% borrowed more than the $150,000 limit, compared to 25% of borrowers overall. Although we are unable to measure the composition of J.D. borrowers who received Pell Grants in the College Scorecard data directly, the U.S. Department of Education reports that students of color, first-generation college students, student parents, and student veterans are more likely to receive Pell Grants than their peers. It follows that the new OBBBA borrowing limits could disproportionately impact affordability and access for these groups.

Larger-Scale Issue and Our Estimates

While already alarming, these figures represent an underestimation of the full impact of the policy.

Students whose cumulative borrowing falls between the annual cap (times three) and the median at institutions where median loan debt exceeds the cap. At schools where the median J.D. borrower exceeds the federal cap, we can infer that at least half of borrowers exceed the median – but we cannot determine how many additional borrowers exceeded the cap without exceeding the median (e.g., at a school where median debt was $160,000, the number of graduates who borrowed more than $150,000 but less than $160,000).
Borrowers at institutions with median debt below the cap who nonetheless exceeded the limit. Students who borrowed more than the cap but attended institutions with medians below the borrowing limit are not included in our estimate of potentially affected borrowers.
Our estimates are intentionally conservative and understate the number of law students who may need to rely on private loans to cover unmet costs, given the limits of available data. More granular, student-level borrowing data would be needed to improve the precision of these estimates. Notably, one analysis suggests that more than 35% of law students may borrow more than the $200,000 lifetime cap.

Likely Results and Additional Resources

These data indicate that the loan caps may significantly reduce the affordability and access to a law degree. After July 1, 2026, prospective law students who expect to rely heavily on federal Direct student loans to fund their legal education may need to limit their search to less expensive programs at public institutions or consider taking on private loans.

Students who intend to use private loans should consult institutional preferred lender lists to find vetted private lenders that meet their needs. AccessLex Institute^® offers a suite of pre-law resources to help prospective law students anticipate their costs of attendance, including XploreJD, the Student Loan Calculator, the Scholarship Databank, and our new Private Loan eXchange^℠.

For more detailed information about changes associated with OBBBA, see our FAQ.