The Department of Education released a Notice of Proposed Rulemaking on Jan. 29, announcing its intention to restructure the student loan system in an attempt to lower the cost of higher education.
The changes would eliminate the Graduate PLUS loan program, which allows graduate students to borrow money from the DOE covering up to the full cost of attendance. Additionally, the NPRM would place caps on the Parent PLUS program — a loan program for parents of dependent undergraduate students — and allow institutions to place their own program-specific caps on the amount students can borrow.
If adopted, the changes will take effect beginning July 2026. Students or parents currently using the PLUS loan programs would be grandfathered in and receive the same amount of loans as they did before the change.
The NPRM initiated a public comment period, required by law for all DOE rulemaking, during which the Department can still make tweaks to the policy change. Although the changes are not official, the proposal will likely move forward with minimal alterations, as the provisions were already outlined in the One Big Beautiful Bill Act. The changes are expected to have a major impact on college financing.
“There’s a concern that one of the impacts of all these changes will be that there’ll be fewer lower-income students accessing graduate programs,” Rob McCarron, CEO of the Association of Independent Colleges and Universities in Massachusetts, said.
The Tufts Tuition Pact, announced last fall, stipulates that students from families earning less than $150,000 a year with typical assets will attend tuition-free, starting with first-years next year. Other expenses will be covered by Tufts on a sliding scale. The Tuition Pact only applies to U.S. undergraduate students, however.
According to McCarron, Graduate PLUS loans supplied graduate students in Massachusetts with approximately $450 million toward their cost of attendance in 2025.
Similarly, Parent PLUS loans allowed parents to borrow up to the full cost of their undergraduate child’s attendance. The Parent PLUS loan program would be capped at $20,000 per student per year and $65,000 in aggregate.
These changes will affect the financial outlook of future Tufts graduate students, who currently number approximately 6,000.
Tufts Associate Dean of Financial Aid Meaghan Hardy Smith wrote in a statement to the Daily that the university is closely monitoring the proposal.
“At this time, our priority is addressing the immediate impact on our current students and applicants, ensuring they understand how these changes may affect their financing options and what institutional resources may be available,” Smith said. “We are closely monitoring federal implementation guidance and remain committed to transparency as more details become available.”
The proposed rule would also introduce new annual caps on federal loans for graduate students, distinguishing between professional and nonprofessional graduate programs. Graduate students pursuing degrees classified as “professional” by the DOE would be limited to $50,000 per year in federal student loans, while those in programs not classified as “professional” will be limited to $20,5000 annually.
In the NPRM, the DOE classifies just 11 fields as professional: pharmacy, dentistry, veterinary medicine, chiropractic, law, medicine, optometry, osteopathic medicine, podiatry, theology and clinical psychology.
The DOE has received pushback for its failure to classify certain fields, such as nursing, as professional.
The DOE’s NPRM announcement emphasized that the “professional” classification is a term meant solely to distinguish programs eligible for higher loan limits.
“The designation, or lack thereof, of a program as ‘professional’ does not reflect a value judgment by the Department regarding whether a borrower graduating from the program is considered to be a ‘professional,’” the announcement reads.
Another aim of the NPRM is to simplify the federal student loan repayment system. Borrowers will now choose between a new tiered standard repayment plan and an income-based plan. According to the Department’s announcement, the new tiered plan is meant to ensure that interest rates for borrowers who make their payments on time do not increase.
In the NPRM announcement, Under Secretary of Education Nicholas Ken wrote: “President Trump’s Working Families Tax Cuts Act offers a once-in-a-generation opportunity to lower tuition costs and improve the student loan system to better support borrowers.”
McCarron pushed back on the claim that borrowing limits would reduce tuition.
“I don’t buy into the argument that institutions simply raise tuition because there’s lending and financial aid available,” McCarron said. “In terms of capping the loan limits and the total limits, the ones that are really going to feel that are the students and families unfortunately.”
Individual states’ student loan systems may be reevaluated because of these changes. McCarron said he expects the Massachusetts Educational Finance Authority, a state agency committed to helping students pay for college, to “stand up programs that will help to provide some lending.”
With federal student loans becoming more limited, more students will likely have to use private lenders — something that could disproportionately affect lower-income prospective students.
“The concern there when private lenders enter the market is, will students that have lower credit scores be forced to pay higher interest rates or not be offered any lending at all?” McCarron said.
Hardy Smith explained that Tufts’ current priority is on enrolled and incoming students.
“Once we have stabilized support for currently enrolled and incoming students, we will shift our focus toward assessing the longer-term implications for student loan repayment and borrower outcomes under the new framework,” she wrote.
