Education has long been hailed as the “great equalizer,” but legislation etched into law this summer threatens this cornerstone of economic mobility, particularly for women of color pursuing higher education.
In early July, the president signed the Republican-led budget reconciliation legislation, known as the “One Big Beautiful Bill” (OBBB). The OBBB has devastating impacts on higher education, and therefore, women’s economic mobility. Due to the bill’s cuts to critical funding for federal student aid and new limitations on borrowing, the future of educational attainment is left uncertain for students who rely on tuition assistance to access higher education, particularly women, students of color, and student parents.
One of the pivotal changes to higher education in the OBBB is the disbanding of the Grad PLUS loan program. The elimination of this integral source of aid comes at a crucial point in the higher education landscape. Some universities are taking the Trump administration to court after being stripped of federal funding, while others made budget or department cuts related to equity efforts on campus in hopes of avoiding being targeted by the administration.
As a result of the disbanding of the Grad PLUS loan program, nearly half a million prospective graduate students will be financially impacted. Historically, Grad PLUS loans, like other forms of public student aid, have been an invaluable financial resource for graduate and professional students, primarily because they cover the entire cost of attendance, minus any financial aid the student receives. But new OBBB provisions cap federal aid at $20,500 per year and $100,000 in total for master’s and doctoral students, and $50,000 per year and $200,000 in total for students in professional degree programs.
Grad PLUS loans have been critical for postsecondary students to help close the gap in rising graduate program costs. Over the past 20 years, the cost of master’s programs has more than doubled, and the average cumulative financial aid debt incurred by master’s degree recipients has risen by $35,000. Unsurprisingly, in the last decade, graduate students have increasingly relied upon Grad PLUS loans, and the annual amount dispersed rose by several billion dollars.
Notably, those most acutely impacted by the elimination of Grad PLUS are women of color. Women disproportionately take out more loans than other students, with Black women holding the highest rates of student debt. Due to the racial wealth gap in the United States, Black women borrowers are less likely than other groups to receive help paying off loans from family or friends. The effects of this racial wealth gap on student borrowers are compounded by the gender wage gap. According to IWPR’s State Policy Action Lab (State PAL), Black women with a graduate degree earn significantly less than White men with just a bachelor’s degree.
While the Grad Plus loan program is by no means the single solution for eradicating gender and racial wage disparities, it has still been a crucial resource for women to obtain financial security amidst systems that were not built with their needs in mind.
Without Grad PLUS to cover the full cost of attendance, many graduate and professional students will be forced to rely on private loans with heightened interest rates. For women—particularly women of color—this means taking on significant debt while still facing the full weight of the nation’s worsening gender and racial wage gaps, regardless of degree completion.
Though the OBBB’s elimination of the Grad PLUS loan program and financial aid cap provisions are in place for now, policymakers must take action to make higher education accessible and affordable for women.
For an overview of the OBBB’s harmful higher education provisions, as well as policy solutions to support women and families, read IWPR’s latest policy brief, “Threats to College Affordability: Impacts of the OBBB on Women and Families.”
This blog was prepared by Landis Varughese, with additional support from Emily Maistrellis, Salma Elakbawy, and Shannon Emmett.
