Student loan reform already lowering graduate school tuition

Colleges are already starting to cut tuition mere months after President Donald Trump and congressional Republicans ended limitless borrowing for graduate school in July with the One Big Beautiful Bill Act.

Santa Clara University Law School in California announced last month that all incoming students for 2026 will receive a $16,000 scholarship, effectively lowering tuition to $50,000 – the new cap on graduate school borrowing.

Preston Cooper, a senior fellow at the American Enterprise Institute, said the move is a direct result of Trump’s reform. 

“Santa Clara says that the initiative is ‘designed to offset the impact of the recent repeal of the Graduate Plus federal-loan program, which is effective July 1, 2026,’” Cooper wrote. “It is ‘designed to ensure that next year’s incoming class has access to the funds they need … despite new federal loan limits.’” 

The Silicon Valley school is effectively cutting tuition 21% from $63,280 last year, rather than increasing it 4.3% to $66,000 – the expected new cost of one year at the Catholic institution. The last time tuition was under $50,000 was eight years ago, according to a chart posted by philanthropist John Arnold on X. 

“I expect many schools to copy this,” Arnold posted about the tuition cut. 

Cooper agreed that there are “likely many more” schools that could follow in Santa Clara’s footsteps. 

In 2004, before Congress lifted limits on graduate borrowing, the average law school debt was $115,000, adjusted for inflation. By 2020, it had climbed to $155,000. 

“Law schools have a proven ability to function without unlimited federal loans,” Cooper wrote. “While uncapped borrowing allowed tuition and underlying costs to get out of control at many graduate schools, the new loan limits in OBBB can move the needle back toward more reasonable tuition costs and debt burdens.” 

Research indicates graduate student indebtedness skyrocketed in the years after loan limits were removed – across law, medical and health professions programs, as well as graduate education overall.