377: Graduate PLUS Loans Are Ending: What You Need to Know Before Accepting an Offer

Today I'm talking about one of the biggest changes to grad school financing that we've had in years. The fact that graduate plus loans are ending means that many future borrowers, including those who are applying to master's programs, Ph.D. programs, and professional programs will no longer be able to access loans that have historically helped them to close the gap. And if you are feeling overwhelmed by this headline, please know you're not alone. I am very familiar with what has been going on this year because I've been having these conversations with my one-on-one consulting clients and I've spent years helping students navigate grad school admissions, financial aid, and how to make decisions about grad school that involve finances. And I will tell you this, it's not just this year. In general, a lot of individuals, including first-gen students, will receive an admissions offer or an award letter and they have absolutely no idea what it means financially. And they are having to make one of the biggest financial decisions of their life without adequate or complete information. So I'm just here to offer an episode to let you know what it means for grad plus loans to be ending and what you can do about it. Welcome to the award-winning Grad School Mentoring Podcast, the place where first-generation BIPOC students and professionals can listen in on inclusive grad school stories and gain practical tools for sustainable success. This is Dr. Yvette Martinez Vu, a certified coach, consultant, author, and speaker. I will be serving as your femtor, providing you with insider knowledge to help you thrive in grad school and beyond. Welcome back everyone to another episode of the Grad School Mentoring Podcast. This is your host, Dr. Yvette. Yes, that's right, today I am talking about the end of graduate plus loans and what it means for you. Specifically, I'm going to be talking about what changed, how different kinds of graduate students may be affected, what questions you should be asking your financial aid office, what you should understand before saying yes to taking on any student debt, and I'll also share another couple of strategies that can make a difference for you before you decide to enroll in a grad program. Before I get into the details, I'm going to share a quick disclaimer. As always, this episode is intended for educational and informational purposes only. It shouldn't be considered financial, legal, or tax advice. I'm sharing some general info and I'm also sharing some insights from my experience supporting grad students and prospective grad students. My goal is to help you to better understand the hidden curriculum around grad school funding so that you can ask the right questions and make informed decisions. Okay, let's talk about what actually changed. Historically, eligible graduate and professional students could borrow federal direct unsubsidized loans and then use graduate plus loans to make up the difference, to borrow the additional money that they needed to cover the full cost of attendance. And just in case this is news to you, graduate loans are unsubsidized loans. You might be expecting them to be subsidized because sometimes in college when you take on loans, you might get subsidized loans and you assume that there's no interest that's being accrued while you're in school. That's not the case for graduate loans. They are unsubsidized, which means interest will be accruing while you're in school, immediately after you accept the loan. So please know that. But the graduate plus loan is an additional option that helps you to make up the difference of whatever the gap is in terms of lack of funding. Let's say you get a scholarship or a fellowship and it only covers a certain amount, it doesn't cover everything. You could then have a direct unsubsidized loan and a graduate plus loan to make up the difference. Now, we don't have the graduate plus loans. We also have additional loan caps. If you want to learn more details, I talked about what is happening through an update on the big beautiful bill that was signed earlier this year. And all of this goes into effect in July 2026. So I'll link that other episode for you to check out if you want more of the details. But for the purpose of this episode, I'm focusing on the end of graduate plus loans because that goes into effect very soon. And I don't want to scare you because I also want to mention that for some students, this is not really going to have a big impact because they're going to graduate school and they have full funding, so they don't plan to take on any debt. But for others, especially if you are attending expensive programs or programs that historically rely heavily on loans, then this could significantly impact how you finance your graduate education. Above all, I just right now I want you to remember that every situation is different and it's hard for me to make generalizations. But I'm going to share a couple of scenarios just so you can get a sense of how this might potentially impact you if you are a graduate student or going to be a graduate student very soon. The first scenario is, let's say you are applying for master's programs or have been admitted to a master's program this year. Usually, master's programs are two-year programs and the tuition ranges, right? It could be 30k, it could be 60k, it could be 80k a year. Let's go with the 30k number. Tuition is 30k a year. You have to then add mandatory fees to that, which will add a couple thousand dollars. Then you have to add your personal living expenses, that's housing, that's transportation, that's food, books, health insurance, and any other living expenses. And that will bump up the number at least another 20 to 30k more. And sometimes, master's students will get a scholarship, but historically that scholarship doesn't amount to the full cost of attendance. So you'll get a partial scholarship, let's say it's 10k or maybe it's 50% of the cost of tuition. It could even be up to, I've seen 33%, 50%, and even 75% of tuition. So you get a partial scholarship, which is great, but then there's still a gap between your scholarship amount and your total expenses, your expenses for both tuition and the cost of living. What I want to say about this is that I want you to recognize the full cost of going to graduate school, not just the cost of tuition alone. And then I want you to ask the following questions. I want you to know, how much can I borrow in loans? How much will still be left uncovered even with these loans? Will I need to make up that difference with savings or with family support, if you have any, or with employer assistance programs, or by applying to a graduate assistantship? Or will you even have to consider the option of taking on a private loan? And private loans, I've talked about them in the past. I'm not a fan of them because they don't tend to have the same amount of flexibility and the same amount of repayment options and protections that some federal loans offer. So just keep that in mind. They also tend to have much higher interest rates, which isn't great. But I want you to know it. I want you to know, okay, this is the full cost of attendance, including my living expenses. This is tuition. This is living expenses. This is all the other expenses. This is what I'm expected to pay for my education per year. This is how much I'm getting in the form of loans, in the form of scholarships. And this is the gap. How will I make up for that gap? Will I have to take on a part-time job, a full-time job? Will I need to pause on graduate school, take a couple years to save, et cetera? Only you can decide what that's going to look like for how you're going to make up that difference. And I'm mentioning this primarily for master's students and for professional programs as well. That's when I see people taking on the most amount of debt. Applying to graduate school can feel overwhelming, especially when you're navigating the process without insider guidance. Through my grad school admissions consulting services, I offer first-generation and or BIPOC students who want strategic and culturally relevant guidance throughout the application process. Together, we can build a thoughtful grad school list, help you refine your CV or resume, develop a compelling personal statement, help you prepare for interviews, review funding offers, and accept an offer that excites you. I meet you wherever you are in the process and provide feedback and guidance every step of the way. Consulting packages also include access to my graduate admissions resource library with dozens of resources, as well as email and voice memo support between sessions. Past clients have submitted applications they felt comfortable with that reflect who they are and what they stand for. They have also been admitted to competitive programs, secured over six figures of funding, and say that this was the best investment they've made in the process. If you're preparing to apply, visit gradschoolfemtoring.com to learn more and schedule a free consultation. Now let's talk about a different scenario. Let's talk about you being in a PhD program. So you're applying or you've been admitted or you're in the middle of a PhD program. The good thing about it is that a lot of doctoral programs, especially PhD programs, not necessarily the professional doctorates, so not necessarily the EDDs or the PsyDs, but definitely the PhDs, they will aim to get you fully funded. Not all of them, right? Nowadays, I'm seeing all kinds of things. I'm hearing about departments that are doing funding freezes or they're admitting students but aren't providing any funding or they're providing partial funding, so a lot of things are changing. But generally speaking, there are still a lot of programs that are aiming to get you fully funded. That means your tuition is waived. That means that they will cover your health insurance. That means you'll get a stipend. And for a lot of people, that may be enough to cover your expenses. But not always. If you are a non-traditional student, if you are someone who comes from a low-income background, you will still have to cover costs like moving expenses. That includes a security deposit. If you're a parent, you might have child care costs. Then there's technology expenses, emergency-related expenses, or some programs will say that they're fully funding you and they only pay you nine months out of the year and they don't offer summer funding. So that's another gap. No summer funding. Or sometimes you get funding, but the funding that you get is delayed. What happens if you're late on getting paid? Then what? You need to account for this. And that's why I'm telling you this. You want to know, okay, are they providing me with nine months of funding or 12? Are they providing summer funding or not? Do they offer emergency funds, emergency grants? Some universities do, others don't. Some programs even allow you to begin in the summer. This is for master's and PhD programs. And one of the benefits of doing this is that then you get funding earlier, which could help with relocation and housing costs. That's actually something that came up for one of my clients recently, that she got accepted to a master's program and they gave her the option to start in the summer and to take online courses for the summer only. And this is great because it allows her to get funding in advance, which will help her with her relocation expenses. And because it's online, she doesn't have to move to that school right away. She has a little bit more time to do that housing search. So just keep this in mind. Always ask about these things. Don't make any assumptions. Okay. The last scenario is the professional degree program scenario. In this case, let's say you're applying to med school, law school, dentistry school, physical therapy, occupational therapy, pharmacy, or any other professional program. These programs are expensive. They have high tuition costs and some of them are located in high cost of living areas too. This means that you will need a lot of different types of funding sources to make it possible to pay for your schooling. This might include federal unsubsidized loans up to the cap. This could also include scholarships, again, employer benefits, public service programs. If you have to work for several years and accumulate a personal savings, that's what some people do. Some people, again, I don't expect this to be you because I know so few of us have access to this, but some folks get family support. And once again, in some cases, you might have to take on private loans. I am not a big fan of private loans because of what I said earlier, interest rates are higher, repayment options aren't as great, they don't have as many borrower protections, and they also don't offer any forgiveness opportunities as far as I know. So in general, it's not great, but it's always good to know what your options are. Why? Because the reason why this policy change is getting implemented now, the reason why graduate plus loans are getting eliminated, is because our current political landscape is making it harder for first-gen students, low-income students, folks who historically haven't been able to finance their education without loans. They're making it harder, they're adding an additional barrier. And I'm here to remind you that while it will be harder, and it will require a lot more work and strategy and being more resourceful, please know that we have made things work and we will continue to make it work. So if that's still your dream to go to graduate school, and it's a requirement for your career, please don't let this hold you back from finding a way to make it work. And speaking of finding a way to make it work, I want to give you some questions to ask the financial aid office. If I can offer any insights, please be the squeaky wheel. Don't be afraid, don't be shy, don't be embarrassed, be the annoying person that reaches out and makes friends with someone at the financial aid office to ask all of the questions. Schedule a meeting, send the emails, ask anything. You can ask about tuition and costs. What is the tuition per term? What are the mandatory fees that I should expect? What's the total cost of attendance? How much do you think I should budget for housing and living expenses? You can ask about your financial aid award letter. What have you been awarded? How much of it is from grants and scholarships? What amount are you getting for loans? And when will I get this money dispersed? That's a big question to ask because that is going to impact your budgeting. So when will you have money? When will you get paid? Will tuition be deducted automatically? Most of the time it is, and then you get the leftover. And for the money that's left over, again, ask when will I receive it? You can also ask about other funding options. If they have graduate assistantships, if you can still apply for them. Same with any other kind of teaching, research assistantships. Ask about scholarships. Ask about emergency funding options. Ask about summer funding. Ask if they offer a summer start option. Ask about conference travel. Ask about child care support or child care scholarships. And if you have a funding gap, ask how do students usually bridge that gap? Do many students use private loans? Are there any other loan programs to look into? And what other resources do they want you to review before you make a decision? Yes, this is a lot of information. It may feel like information overload. If it's too much for you to handle right now, give yourself a moment to breathe. Maybe talk to a trusted person to have them review things with you, so that they can catch some of the things that maybe you're not noticing, because it is so much information. So give yourself permission to slow down, to take the time you need to review everything, and to make an informed decision. That's it. Take a breath, read every document. If you need to make a spreadsheet to compare your offers side by side, do that. But before you say yes, know what you're signing up for. Understand what you're borrowing. Know what the interest rates are. Know when interest starts accruing. Know when you're going to get paid, and what your monthly commitment will look like, both during graduate school and also for repaying your loans after graduation. Please don't be embarrassed about having to ask all of these questions, even if it means someone explaining to you over and over again what your financial aid package means. I want you to understand that it's completely normal to feel overwhelmed and to be confused by the information presented to you. So please get those answers, ask for some clarity, and give yourself permission to ask those uncomfortable questions, because you deserve transparency, and you deserve informed consent before taking on any potential debt. All right, that's it for today's episode. Please let me know if you have any additional questions, and if you found this episode helpful, please send it to a friend or a colleague who could benefit from this information. And as always, I will talk to you all next time. Thanks so much for listening. If you liked what you heard, here are three ways you can support the show. The first is to make sure you're subscribed and leave a review on Apple Podcasts. The second way is to get your copy of my free resource kit linked in my show notes. This kit includes tools, worksheets, and curated podcast playlists to guide you through applying to and navigating grad school. The third way to support my show is by joining my email newsletter, where I share key takeaways and additional resources. Thanks again for listening, and until next time.