July 2026

Julie Posselt is an AERA Fellow. She is a professor in the Rossier School of Education at the University of Southern California (USC), associate dean of the USC Graduate School, and founding director of the Equity in Graduate Education Consortium.

Graduate education in the United States is now pursued by more than a third of those who obtain bachelor’s degrees, and the sector is undergoing a period of significant structural change. Recent federal policy developments, including provisions taking effect this month under the One Big Beautiful Bill, will directly affect who can afford to enroll, who receives funding, and who can remain in the country after they graduate. 

Four main structural changes signal a retreat in the federal government’s investment in graduate and professional education. 

1. The elimination of GradPLUS loans for new borrowers, which the government hopes will drive institutions to reduce their tuition—and thereby reduce student debt—will create a significant barrier for those without independent wealth. Estimates show that more than 500,000 Americans have borrowed using this program.
   
   So far, there is little evidence that universities are dropping tuition, in part because the three additional federal policy changes described below make doing so increasing difficult. Taken together, these changes will make it more difficult for universities to sustain strong, affordable graduate programs at all.
    
2. Administration cuts and reorganization in federal agencies, along with the loss of leadership in key positions, have disrupted federal research funding. Institutions depend upon such funding to support research assistants, especially in PhD programs. As a result, PhD cohorts are shrinking, revenues are decreasing, and some programs will skip admissions this year altogether.
    
3. New caps on graduate borrowing will fundamentally change how students finance advanced degrees. In addition to no longer being able to borrow up to the cost of attendance through Grad PLUS, students also face new annual and lifetime borrowing limits. Non-professional graduate degree seekers may borrow up to $20,500 per year and $100,000 total in federal loans. Those seeking professional degrees (such as medicine, dentistry, law, pharmacy) may borrow up to $50,000 per year and $200,000 total.
   
   A related story still in development is what, exactly, should be classified as a profession. Education graduate programs are caught up in this and stand to gain or lose from how it is resolved.
    
4. Finally, caps and barriers to international student enrollment are also limiting tuition revenues that have been integral to supporting graduate education and faculty. Stricter immigration policies, including travel bans affecting 19 countries, intense visa application hurdles, and a new $100,000 fee for H-1B visas present immediate barriers for international students seeking to pursue graduate education in the U.S.

These changes are more than “inside baseball” for higher education leaders. The budget model of universities has come to depend on graduate education, especially tuition from master’s degrees—perhaps more than we should. The current moment may prove a correction, a bubble, or an existential crisis.

There’s never been such simultaneous pressure on loan access, research funding, and international enrollment. But the changes do echo privatization trends in federal financial aid that started in the 1970s, when shifting federal aid from grants (to students with need) to loans (for middle income students) shifted who could access higher ed and with what resources. 

To be clear, the need for more affordable advanced training is real. Costs of master’s and professional degrees have increased while the availability of grants has decreased. Though administration leaders like Education Secretary Linda McMahon claim affordability concerns drive their decisions, they are also treating advanced education as a private consumer choice and a matter of personal responsibility. This is to misconstrue graduate advanced training as simply an individual benefit when, in actuality, there are widespread, direct, and varied public benefits to a highly skilled workforce. The credentials it awards are required for many careers that directly serve the public, from education to social work to biomedical research to nursing and many more.

I suggest universities consider six areas of adaptation, if they have not already:

Transparency in Advising and Student Decision Support: Pursuing graduate education is now an even higher-stakes decision. It’s a multi-year financial commitment, a professional pipeline, and for some, a life plan that depends on the availability of visas. In a moment of rapid policy change and fragile public trust in higher ed, our transparency about how graduate education works, and how much financial responsibility students should expect to bear, is more urgent than ever. 

Rebalance Funding Models Away from Federal Dependence: Institutions should diversify graduate funding streams, including philanthropy targeted at graduate fellowships, industry partnerships, and state or regional workforce investments. We may need to rethink certain cross-subsidies, ensuring that graduate programs critical to public workforce needs (e.g., education, healthcare, social work) are not solely tuition-dependent

Redesign Program Length, Structure, and Modality: If students can no longer rely on expansive loan access, time-to-degree and flexibility become central affordability levers. Accelerated and stackable credentials like 4+1 programs and certificates that ladder into degrees can reduce upfront financial risk.

Rethink International Student Strategy: Given the uncertainty around visas and enrollment, universities cannot over rely on international students as a revenue source. They should invest in more robust global partnerships, including dual degrees, offshore programs, and joint research centers that do not rely solely on U.S.-based enrollment. We are already seeing that enhanced immigration advising and career placement support for international students will become a key differentiator among institutions.

Reconfigure PhD Education and Research Training: Universities are also already proving the need to reduce PhD cohort sizes, pause admissions in some fields, or otherwise rethink doctoral enrollment management to protect funding guarantees for those admitted. Additionally, alternative funding models—such as industry-sponsored research, interdisciplinary institutes, and mission-driven consortia—will be increasingly important. 

At my current institution, the University of Southern California, the Graduate School has shifted our central fellowships toward recruitment and completion as one measure, and we are developing a public humanities program that will be jointly funded by USC and area cultural institutions. That’s not to say we have figured it all out; USC, like most higher education institutions, is still grappling with the rapidly changing dynamics.

The current moment is likely not a temporary disruption but a lasting policy shift. That means sharing strategy, wisdom, and struggles will be critical. So too will institutional agility, by which I mean leadership, governance, and data-driven decision-making practices, should develop greater capacity for adaptation and change management.

As a scholar whose expertise has long included the organizational dynamics of graduate education, I welcome the chance to connect with other education scholars who are grappling with these issues in their local contexts. The future of graduate education in education is still ours to write.

We should build on what we learned during COVID about contingency and scenario planning, and ensure leaders at the program, department, school/college, and university levels are all developing capacity to guide our institutions—and the students the society is counting on us to train—through this time of change.