ABA Journal, Law Schools Scramble to React to Shifts in Financial Aid Rules:

The One Big Beautiful Bill’s mandate to kill Grad PLUS Loans and impose strict limits on student borrowing has law school administrators scrambling to sort through the law’s restrictions as they dig into data, shift messaging, reconsider scholarship funding and determine how new outcome rules will impact their schools.

“The message that we’re trying to get out to schools is ‘Don’t panic,’” says Gisele Joachim, Law School Admission Council vice president for law school engagement. “We just don’t even know everything yet.”

But what is known is that starting July 1, 2026, the bill kills Grad PLUS loans and caps unsubsidized federal loans to law students at $50,000 a year and $200,000 for graduate education over a lifetime.

“You can see where that wouldn’t be enough,” Joachim says, “either because the tuition on its own is above that, as it certainly is in most cases, or the cost of attendance is more than the $50,000.”

According to the 509 data provided by law schools to the American Bar Association, only 13 law schools have a total cost of attendance of less than $50,000 per year, says Stephen Brown, assistant dean of enrollment at Fordham University School of Law. “They should be advertising themselves to students as great options with costs less than the new federal direct loan cap,” he adds. …

Small private law schools could be hit especially hard, administrators contacted by the ABA Journal say, impacting how they are run—and, possibly, if they survive.

“This could shut down many law schools,” says University of Washington School of Law Dean Tamara Lawson. “We’re under 200 law schools now. Maybe we become 100 law schools.” …

While law schools have many levers they can adjust regarding students’ ultimate costs, lowering tuition prices isn’t an option at every law school, Lawson says. “ …

Adjustments in how scholarships are awarded and funded could change to help students offset a school’s sticker price, administrators say.

Based on the 509 data studied by LSAC, “There is significant offset from scholarships for many students, and at some schools, it’s the vast majority,” Joachim says. “I don’t know if the schools will have the ability or financial wherewithal to put more money in those pots. But again, there could be a shifting of sorts of priorities of who that money goes to.”

She says colleagues, particularly admissions professionals, are considering ways “to at least inch away from the very heavily merit scholarship environment that we’re in, and trying to think creatively about ways to shift some of that to need-based money.”

And those funds could come from alums and other donors, she adds. “I have heard colleagues say this provides a pathway for them to ask the development officers to seek specific grant money from donors to support financially needy students,” Joachim adds.

At UW Law, leaders are hopeful they can provide other loan opportunities via local lenders.

+“I don’t think we’re in as bad of a position as some places,” Lawson says. “We believe that we would ultimately be able to find lenders within our region to support University of Washington students.”

Prior TaxProf Blog coverage:

• AccessLex, The Impact of Capping Graduate Loans on Law Students
• Balls & Strikes, Trump’s “Big, Beautiful Bill” Will Make Law School Unaffordable For People Who Are Not Already Rich
• Chronicle of Higher Education, The End Of Unlimited Grad-School Loans Could Leave Some Law Schools And Students In The Lurch
• Chronicle of Higher Education, Free-Standing Law Schools Would Be Most Impacted By Republican Proposal To Eliminate Grad PLUS Loans
• Steven Chung (Tax Attorney, Los Angeles), The Impact Of The One Big Beautiful Bill Act's Federal Student Loan Limits On Law Schools
• Derek Muller (Notre Dame), Law Schools Are Unprepared For A Likely Coming Cap On Federal Student Loans
• Derek Muller (Notre Dame), Will the New Student Loan Law Hobble Some Law Schools' Reliance on Non-JD Forms of Revenue?
• Reuters, Closure Of U.S. Department Of Education Imperils Law School Finances, Deans Say
• Reuters, Proposed Law Student Loan Caps Could Hit Minorities, Low-Ranked Law Schools The Hardest
• Jeff Sovern (Maryland), The Impact Of A $150,000 Cap On Government Loans For Law Students

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