Student loan caps could hit minorities, low-ranked law schools the hardest

REUTERS/Jim Urquhart

Aspiring attorneys who cannot afford full law school tuition may face higher costs for their degrees and potential exclusion from law school under a pending Republican proposal to cap student loan borrowing, according to legal education finance experts and law deans. Here's what to know:

In May, the House passed the budget reconciliation bill, which is currently under consideration by the Senate, with proposed annual caps ranging from $50,000 to about $77,000 and aggregate borrowing caps of $150,000 to $200,000 for professional degrees.
The proposed cap would require students who hit the limit to turn to private loans to cover additional costs, which could mean higher interest rates for borrowers. Education experts say the cap would disproportionately affect students in high-cost programs like law and medical degrees.
Data from AccessLex Institute shows law students on average borrowed $146,800 in 2020, the highest outside of medical degree programs. The percentage of law students who took out loans for law school was 76%, up from 71% four years earlier.
Proponents of loan caps argue the current system has incentivized colleges and universities to increase tuition and has made it too easy for students to enroll in programs with low employment outcomes at taxpayers’ expense, leaving graduates with decades of student loan repayments.
The cap would be felt most deeply at low-ranked and unranked law schools because some students will struggle to secure private loans, said AccessLex President Chris Chapman. Private loan providers are likely to assess applicants' grades, scholarships, job prospects, and finances, potentially denying loans to those considered too risky.
Ronald Weich, dean of Seton Hall University School of Law, warned that loan caps could reduce racial and socioeconomic diversity among law students, making the profession less inclusive. Learn more.

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