The Graduate Schools Cutting Tuition as Loan Limits Take Effect | American Enterprise Institute

In response to high tuition costs and out-of-control student debt, last year Congress voted to cap student loans for most graduate students at $20,500 per year (with higher limits for students in certain professional programs, such as medicine). The caps are still high—less than one-third of graduate borrowers took out loans above the new limits before they went into effect. Still, the caps should rein in borrowing at a subset of expensive graduate schools where debt burdens are substantially higher than the average.

Limiting borrowing aims to force expensive graduate schools to lower tuition. Uncapped federal borrowing enables universities to raise prices, year after year, confident that the government will extend loans to students to cover the bill. When Congress removed caps on federal lending in 2006, researchers found that colleges increased their prices in response.

Now, the opposite is happening. After Congress passed the new limits, several universities have announced that they are reducing tuition or providing new scholarships for graduate students beginning this fall. Some have explicitly tied these decisions to the new loan caps, while others have simply announced the changes without deigning to credit the loan limits.

Institutions lowering prices or expanding scholarships include the following:

• Emory University. Students in several graduate public health programs who applied by January 2026 and enroll full-time will receive a guaranteed $25,000 tuition scholarship. A dean said the decision was made “in light of recent changes to graduate student loan programs.”
• Johns Hopkins University. Full-time students in specialized master’s programs within the Carey Business School will receive a 50 percent tuition scholarship if they completed an undergraduate degree at a Maryland institution in 2026.
• Lewis & Clark College. The Graduate School of Education and Counseling is offering guaranteed scholarships to students with documented financial need whose programs start in fall 2026. The scholarship was created “in direct response to…the elimination of access to the Grad PLUS loan.”
• Neumann University. The school has reduced tuition for its nursing and cybersecurity programs by 15 percent to 29 percent, and frozen tuition for all other graduate programs in the 2026–27 academic year. This move comes “in response to the Department of Education’s decision to lower loan limits for postbaccalaureate degrees.”
• New Mexico State University. Starting in fall 2026, working graduate assistants will receive tuition scholarships to cover a full-time course load, up from two-thirds of a full-time load before.
• Our Lady of the Lake University. A new scholarship program reduces tuition to $750 per credit hour for students entering the online Master of Social Work or Master of Arts in Counseling programs during the coming academic year; this represents a 27 percent cut in per-credit-hour tuition costs.
• Purdue University. Beginning in fall 2026, Purdue will slash tuition by more than 30 percent for students in its online Master of Science in Global Supply Chain Management.
• Santa Clara University. Incoming law students in the fall of 2026 will receive a guaranteed $16,000 annual scholarship, which “aims to offset recent federal loan changes.”
• University of California, Irvine. This fall, the Paul Merage School of Business will reduce tuition for its Flex MBA by $30,000 and its Executive MBA by $48,000, which will bring tuition “below the federal loan cap for graduate business degrees.”
• Wayland Baptist University. Graduate students on the university’s flagship Plainview campus will enjoy a tuition cut of more than 35 percent.

These institutions have seen the writing on the wall: the federal government will no longer automatically subsidize any price they choose to charge.

Other colleges are still in wait-and-see mode. Some are waiting for litigation over which fields get access to higher loan limits for “professional” programs to sort itself out before announcing any changes. Others are partnering with private lenders or standing up in-house loan programs to replace federal money.

Universities charging heftier prices—which are therefore more exposed to the new loan caps—will start facing serious pressure to lower them. At the University of Pennsylvania, over 80 percent of students pursuing a master’s in educational leadership borrow above the new loan caps, thanks to the school’s sky-high tuition. But at nearby Drexel University and Temple University, almost all students pursuing the same credential borrow within the new limits. If the government will no longer cover the entire bill at Penn, it may lose students to its cheaper rivals—putting pressure on Penn to lower its prices.

As new loan limits come into effect this fall, this list of universities lowering tuition should expand. For too long, taxpayers have effectively paid for any graduate degree of any quality at any price the institution chooses to charge. No longer: loan limits are finally starting to force some real cost control.