A sweeping change to federal student lending included in the “One Big Beautiful Bill” could significantly disrupt legal education across the country. The legislation, set to take effect July 1, 2026, eliminates Grad PLUS loans and imposes new borrowing caps for graduate students—limits that many law schools say will make it difficult for students to afford a legal education.
The new policy restricts graduate student loans to $50,000 annually, with a $200,000 lifetime maximum. According to data referenced by the University of Washington School of Law, only 13 law schools in the country currently report a total cost of attendance under $50,000 per year. The vast majority exceed that amount once tuition, fees, and living expenses are included.
Tamara Lawson, Dean of the University of Washington School of Law, warned that the changes could lead to widespread closures. “We’re under 200 law schools now. Maybe we become 100 law schools,” she said. Her concern is that schools dependent on federal lending will struggle to attract students who can no longer borrow enough to cover the full cost of attendance.
In response to the legislation, administrators at various law schools are reassessing financial aid strategies. Some are considering adjusting scholarship funds or changing marketing approaches to help prospective students manage the funding gap. The Law School Admission Council has urged caution, noting that schools should wait for regulatory details before making major decisions.
The legislation is part of a broader federal budget initiative that aims to reduce taxpayer exposure to student loan debt and refocus federal lending on affordability. Supporters argue the measure encourages fiscal responsibility and reduces long-term debt burdens. Critics say it disproportionately affects middle-income and low-income students who rely heavily on federal loans to pursue advanced degrees.
If implemented as written, the new limits could reshape the legal education landscape—shrinking the number of law schools and altering access for future generations of students.
