Grad Loan Caps Could Hurt Students With Low Credit Scores
Jessica Blake
January 7, 2026
Researchers found that four in 10 borrowers have credit scores too low for private loans, raising concerns that the new borrowing limits could make grad school inaccessible.
In recent years, at least a quarter of all borrowers pursuing a master’s degree or higher took out more money than will be allowed under new loan caps that take effect July 1, and data shows that those students, on average, would need to borrow more than $21,000 from nonfederal lenders to make up the difference.
Congressional Republicans who put those loan limits in place have stressed that there are plenty of private lenders able to fill the gap. But a recent study shows that based on current lending standards, many of the students who need these loans won’t be approved to gain access.
Conducted by the Federal Reserve Bank of Philadelphia and American University’s Postsecondary Education and Economics Research Center, the study combines anonymized data representing students’ enrollment trends, borrowing history and credit scores to estimate the share of graduate borrowers who’d struggle to obtain the loans they need.
