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Policy and Advocacy Student Loans Article
Author: Madison Watts
Author: Madison Watts
Policy and Advocacy Student Loans Article

Preferred Lender Lists Help Students Navigate the Private Loan Market

The One Big Beautiful Bill Act (OBBBA) made significant changes to the federal student lending landscape, reducing graduate loan borrowing limits under the Federal Direct Unsubsidized Loan Program and eliminating Grad PLUS Loans. Now, professional students (law students, doctoral students, etc.) are limited to $50,000 annually in federal student loans and graduate students are limited to $20,500 per year.

Data from the American Bar Association shows that the national median costs for J.D. programs in 2024 was roughly $79,000.1 For most law students, the loan cap would not be sufficient to cover one year of their J.D. programs. While federal loans remain the cornerstone of graduate borrowing, many students will now face larger funding gaps to cover tuition, fees, and living expenses. This will increase demand for private and institutional loan products, requiring students to make challenging decisions when choosing between many loan types and lenders. For students turning to the private loan market, they are often met with very little guidance on how to choose the lender that is best for them. However, institutions can support students through Preferred Lender Lists (PLLs). PLLs are a resource of vetted private lenders that a school makes available to its students.

Institutions and any institution-affiliated organization (e.g., alumni groups, foundations) promoting any lender must follow the federal regulations outlined in Part 601 of the Code of Federal Regulations. These regulations establish disclosure and reporting requirements relating to education loans.2 For example, schools must include at least three unaffiliated lenders, explain selection criteria, and regularly update their list to reflect current terms and conditions. PLLs must also clearly state that students are not limited to the lender recommendation provided by the school. These safeguards are designed to ensure PLLs serve as a transparent, student-centered resource rather than endorsement of any particular financial institution.

With federal borrowing less able to fully meet the cost of attendance, law students will be weighing private loan options more than ever. In this environment, PLLs give students a trustworthy, school-supported starting point to make informed financial decisions. For administrators, investing in developing and maintaining these lists is an essential way to support student outcomes. Equipping both students and administrators with the knowledge and tools to navigate this evolving landscape is necessary. By strengthening PLLs, schools can help ensure that law students are borrowing wisely to help support them in building thriving legal careers.

AccessLex Institute® is committed to helping financial administrators understand this key student support resource. For further guidance on PLLs and a quick overview of federal regulations, see our one-page resource.

1 American Bar Association, 2024. Compilation – All Schools Data. Section of Legal Education – ABA Required Disclosures. Analysis of full-time, non-resident cost of attendance by AccessLex Institute.

2 Part 601 – Institution and Lender Requirements Relating to Education Loans, Code of Federal Regulations.

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