Take Action Today: Governor Hochul and the New York state legislature have the power to protect access and affordability for all students in New York State’s higher education ecosystem.  We need you to ask New York state legislators to include our sector's priorities in their One-House Budgets. 
 

Background 

Federal changes and the need for New York State governmental relief 

The “One Big Beautiful Bill Act” (OBBBA) of July 2025 enacted sweeping changes to federal programs, including significant new constraints on student and family borrowing. These changes represent the largest overhaul of private student lending since the 2008 Higher Education Opportunity Act and signal an impending economic crisis for the State and a loss of students to neighboring states.  

Elimination of Grad PLUS Loans:  

• The elimination of Grad PLUS Loans will significantly reduce access to advanced degrees, particularly in fields that are essential to New York’s workforce (e.g. education, social work, health sciences, and public service). 
• Approximately 32,000 New York graduate students utilized Grad PLUS loans to cover the full cost of their attendance in 2024-25. The elimination of this program is projected to drive enrollment declines of 8-10 percent in critical fields such as nursing and education. 
• Enrollment of first-generation, working adult, and underrepresented graduate student groups will see a particularly sharp decline as many of these students rely exclusively on Grad PLUS to finance their degrees.  
• Without this federal option, prospective students will be forced into the predatory private loan market. Students will be forced to pay higher interest rates to finance their degrees or abandon graduate studies. 

Parent PLUS Loan Caps: 

• 43,000 New York students are associated with Parent PLUS Loans.  
• Caps on Parent PLUS borrowing, now limited to $65,000 in aggregate, will force undergraduates and families to pursue alternative lenders, with less favorable terms and without the benefit of federal loan protections. 

Definition of Professional Degree 

• With the Grad PLUS loan gone, the U.S. Department of Education is enforcing new, lower borrowing caps on student loans ($20,500/year for standard master’s, $50,000/year for professional). New rules strictly define which programs qualify for the higher "professional" cap. An extremely narrow definition excludes fields like social work, teaching, nursing, accounting, engineering, and architecture, classifying them as standard graduate programs limited to the $20,500 cap annually and creating financial resource gaps that students will have to fill on their own. 

 Private Lenders: 

The reduction of PLUS loans will lead to: 

• increased private borrowing at higher interest rates 
• reduced access to higher education along socioeconomic lines 
• negatively impacted completion rates and outcomes 
• an increase in long-term student loan debt due to higher interest rates from private loans 
• Research indicates that the banking industry views this situation as a strategic opportunity. However, students and families will face challenges when they turn to the private market: 
• Banks expect a 40 percent increase in student loan market size. 
• About 60 percent of Graduate PLUS borrowers will not qualify for private loans. 
• About 50 percent of Parent PLUS borrowers will not qualify for private loans. 

Economic and Workforce Impacts for New York State:  

Recent analysis underscores that federal loan reforms will materially reshape New York State’s economy over the next ten years. If no action is taken, it is likely that New York will lose students to neighboring states. 

• New York has the second largest higher education ecosystem in the U.S., which exposes the state to a particularly high level of risk as compared to other states - with an estimated 75,000 students impacted by changes to the PLUS programs. 
  • Private non-profit colleges endure most of this exposure, particularly because we serve a disproportionately large share of graduate and professional students. 
• Private research (R1 and R2) and private special focus institutions have the greatest share of enrollments at risk, followed closely by public research (R1) institutions. 
• Enrollment losses due to federal loan policies could top 75,000 students by Fall 2030. The economic impact of this enrollment decline represents an estimated loss of $426 million in spending by students and campus visitors at local businesses near college campuses.  
• Analysis projects that more than 29,000 campus jobs could be lost, which represents a loss of $221 million in State payroll and sales tax revenue.  
• Combined with other factors, enrollment declines due to federal loan policies could potentially lead to campus closures. On average, when a campus closes, the surrounding community loses nearly $85 million in annual economic impact - including an average of 400 jobs lost. 
• In addition to the financial impacts of loan changes, delays in international student visa issuance could impact approximately 132,000 students at New York colleges and universities and potential losses must be factored into the broader enrollment landscape.