The new Big Beautiful Bill puts limits on how much money you can borrow for college. Why this is a good thing.

There are changes coming for how students borrow money to go to college.

First off, they are increasing the amount that students can borrow for undergrad education (formerly $31k, now $50k). This reduces family burden on having to obtain loans for their children to go to college.

Second: if you are going to grad school, you are going to have to be more choosy. Grad school changes: The Graduate PLUS Loan program, which allows graduate and professional students to borrow up to the full cost of attendance, will be eliminated. Why is this a good thing? This keeps people who go to med school/law school/dentist school from racking up $300k+ in student loan debt. This is going to force students to pick wisely in the colleges they choose. No more coming out of Harvard with $600k in student debt. And in return, colleges are going to have to recalibrate the cost of education. They have been raking in money hand over fist because they KNEW students could borrow massive amounts of money…..if they no longer have that borrowing ability, universities will have to reduce the cost of education or people will not attend. The new law states that Graduate students will be limited to Direct Unsubsidized Loans with a cap of $20,500 per year and a $100,000 lifetime limit. For medical and law students, the lifetime cap is $200,000, with an annual limit of $50,000.

Third: Caps on Parent PLUS Loans. Parent PLUS Loans will be capped at $20,000 per year per student, with a lifetime limit of $65,000 per student. This prevents parents from going into crippling debt to send their kids to schools that tuition far exceeds the federal loan allowance. Again, this will force universities to REDUCE the cost of education.

Fourth: Pell Grants. If you are on a Pell Grant, your college is entirely paid for as a low income student. The caveat now is you are going to have to commit to 15 hour semesters of college to receive/continue your Pell grant. For the average student, this is more than doable. Most degrees require you to take 15 hours per semester (and sometimes a summer class) if you are going to graduate in 4 years. My stepson is not on a Pell Grant, but he is taking 15 hours plus each semester as an Engineering major. And he is starting his senior year of college this fall, and will graduate in 4 years. He was given several scholarships that he applied for, a small 529 plan, he works a part time job, and he is doing this on his own with very little student loan debt. So yes, there is most certainly a way you can do 15 hours on a Pell Grant while getting your education paid for for free.

There are plenty of people on social media in complete meltdown mode that “I can’t go to med/dental/law/grad school now because I don’t have rich parents”. That is not true. I spent 10 years in college. I worked the ENTIRE time I went to school. I went to a JUCO for my first 2 years of school, and paid as I went. I never borrowed more money than to cover my tuition. I did not go to a fancy Ivy League college. I went to a University that is part of the Missouri state school system that was affordable (and still is). My parents did NOT fund my education. No Parent PLUS loans to pay for my education. And I would change NONE of that. People that want to go for a professional degree are going to have to be creative with how they do it. No out of state schools. Move to where you want to go to school and get in state residency prior to applying. And again…..Universities are going to have to re-think the price of school to compensate for what is affordable to people.

For the last 2 decades, colleges have preyed upon the ideology that EVERYONE should go to school, even those who have no business going to college, who hated school and barely passed high school, who would be best served attending a JUCO to see if college is even a good option for them. They have Universities taking their money via loans, these are the students that cause the high attrition rate for freshman. Colleges know that a good percentage of freshmen are not going to complete a program of study. The students who flunk out or choose to leave after a semester or a year because honestly, college was not the right option for them at that time. The other problem with “everyone should go to college” mentality are students who go to college and rack up $100k in loans for a degree that all but guarantees zero jobs with a return on investment to pay back a $100k loan. If you think a Latin studies degree, a philosophy degree, or a degree in underwater basket weaving that cost you $110k to obtain is going to land you a job out of college in that field of study, with a salary to afford your living expenses and student loan repayment…….I am afraid to inform you that is not the case. Those undergrad degrees assume you are going on to grad school of some type, they are not direct entry to the workforce degrees. So these students go on and spend MORE money for grad school and pretty soon, they owe $200k+ in loans for a degree that they go onto TikTok and complain about how they cannot afford basic life necessities because their student loan payment is so high. I feel for these people, they were sold a bill of goods that the college and student loan system profited off of heavily.

I could probably write a novel on the wasteful spending on collegiate education. I see it every single day. Change was necessary. There has been too much abuse at the University level with these cranked up tuition rates, too much abuse at the student level (loans taken out that were not used for school, parent plus loans taken out that were NOT used for their kids education, etc). The government should not be in the loan business to begin with. Those who want to pursue higher education are going to have to be choosy with where the affordable options are. And Universities are going to have to reduce the price of their overinflated education. Let’s start by reducing the number of fluff admin who make a 6 figure salary with a title that do not even work as an actual professor of anything. And let’s not forget the million/billion dollar endowment funds that many colleges have. How about we use those funds in a different manner. If you are sitting on a billion dollar endowment…..then tuition should be damn cheap.

Some will agree, some will disagree……..but as a person who spent a ton of time in college, I watched this problem explode over the last 2 decades and have waited for change for a long time.