There is a looming financial crisis across U.S. graduate schools after President Donald Trump’s sweeping education reforms. Trump’s reforms have brought an end to Grad PLUS loans for most future graduate students and tightening student visa rules for international enrollees. These changes, combined with deep cuts to federal research funding, are forcing even elite universities to slash budgets, freeze hiring, and rethink their reliance on graduate tuition and international enrollment.
How Ending Grad PLUS Loans Will Reshape Graduate School Financing
The One Big Beautiful Bill Act (OBBBA) that was signed in July 2025, will end unlimited Grad PLUS loans starting July 1, 2026. However, the current students can still borrow the full cost of attendance, but future borrowers will face strict limits:
- $20,500 annually with a $100,000 lifetime cap for most graduate programs.
- $50,000 annually with a $200,000 lifetime cap for medical, dental, law, and other professional degrees.
These caps are far below current borrowing levels for many programs. For instance, in 2019–2020, 73% of dental students who took loans borrowed more than $50,000 in one year, while 57% of medical students and 30% of law students exceeded those amounts.
Without Grad PLUS, many students will turn to private loans, which lack income-based repayment and federal forgiveness programs. Education experts warn this will push students toward higher-paying fields and away from careers like public interest law, primary care medicine, and social work.
Tighter Student Visa Rules Could Slash International Enrollment
Trump’s new student visa policies are expected to cut new foreign enrollments by 30–40% in 2025. This cuts will in turn lead to a 15% overall drop in international students on U.S. campuses.
These measures comprise of:
- Temporary pauses in visa issuance to add social media screenings.
- New restrictions or bans for residents of 19 countries.
- Attempts to expel students linked to or supportive of pro-Palestinian protests.
International students are disproportionately represented in STEM fields, earning 44% of U.S. master’s degrees and 58% of PhDs in those areas. They also contribute billions in tuition revenue, making their decline a major financial blow to graduate programs in the United States.
Research Grant Freezes Add to the Pressure
The Trump administration has frozen research grants to elite universities deemed “too woke.” Some of these universities comprise of Harvard, Columbia, Cornell, Northwestern, and UCLA. He has also gone ahead to cancel $7 billion in science funding across more than 600 schools. Overhead payments have been reduced, and an executive order now requires political approval for new grants, with existing ones subject to termination at any time.
Johns Hopkins, the largest university recipient of federal research funding, has already lost $800 million in contracts, cut 2,200 jobs, frozen hiring, and halted raises for higher-paid staff. Northwestern has eliminated 425 positions, and Duke has cut nearly 600 staff and 40 faculty members.
Why Graduate Schools Are Especially Vulnerable
Between 2011–2012 and 2021–2022, U.S. graduate education boomed:
- Doctorates awarded annually grew 20% to over 203,900.
- Master’s degrees grew 16% to 880,200.
- Graduate enrollment became a key revenue source for many universities.
This growth was fueled by unlimited Grad PLUS loans and increasing numbers of international students. Without these revenue streams, universities face a structural financial challenge.
The Columbia University Case
Columbia is a clear, real-world example of how Trump’s new policies are directly hitting major universities. In 2022–2023, 72% of its students were in graduate programs, of this population, nearly half were from abroad. In July 2025, Columbia struck a deal with the Trump administration: pay $221 million, share more data on foreign students, and reduce dependence on international tuition in exchange for restoring $1.3 billion in annual federal funding.
Who Will Feel the Impact Most
High-cost professional courses in medicine and law will still attract applicants, but lower-ranked or lesser-known schools may be forced to reduce tuition or change financial aid strategies.
Lower-paying career paths are at greater risk. According to data, 46% of borrowing masters of fine arts students and 31% of borrowing masters of social work students exceeded the new $20,500 annual loan limit in 2019–2020. There are high chances that some programs might shrink or even closed since private lenders are unlikely to fund degrees that have low economic returns.
What Comes Next
Universities are already responding by:
- Freezing hiring and cutting staff.
- Reducing or pausing PhD program admissions in grant-dependent fields.
- Considering departmental mergers and tuition restructuring.
If federal funding cuts continue, experts predict more graduate programs will be terminated rather than discounted, as high equipment and faculty costs make rapid tuition reductions impossible.
In Summary
Trump’s simultaneous elimination of unlimited Grad PLUS loans, tightening of student visa rules, and cuts to research funding are the major changes to the financial landscape of U.S. graduate education. The result could be fewer programs, reduced access for low-income and international students, and a lasting contraction in America’s graduate school system.
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