Watching Your Wallet Changes to graduate student loans

In just a matter of weeks, there will be a new cap on how much you can borrow for a graduate student loan. This could significantly reshape how students pay for a degree, and these new limits could also force some of them to make some hard choices. Here's today's Watching Your Wallet. The Federal Graduate Plus Loan program is going away June 30th. And after that, some students will face new borrowing caps. Starting July 1st, there will be a new direct graduate school loan, and the limits are based on whether you're going to graduate school or professional school. Graduate school is typically master's degree programs and other programs like that, and professional schools are certain designated programs that lead to a professional designation. Typically, we think of doctors, lawyers, dentists, things like that as professional school. Things like master's of education, MBA, master's of social work, those are graduate schools. Robert Farrington of The College Investor says grad school borrowing limits will now be $20,500 per year, up to $100,000 total. And professional school will be $50,000 per year, up to $200,000 total. These are very strict caps compared to the current system, which was uncapped. A Federal Reserve study just came out in December that shows that about one-third of current graduate students would probably borrow beyond those caps based on the cost of their programs. Farrington says graduate students are going to have to make some tough choices, so it's more important than ever to really understand the return on your investment in terms of what you can expect to earn as a result of that degree. And we also want to note, experts say you want to consider if it makes sense to borrow money up to the limits. Just keep in mind that if you go beyond that, you're going to be looking at private student loans. Now, we'd love to help you with your managing your money and understanding that you can save a little here or there. If you miss any of these watching your wallets throughout the week, be sure to join me as we stream a recap for you every Friday at 11 a.m.