Overview of New Federal Loan Limits for Student Borrowers

On July 4, 2025, the One Big Beautiful Bill Act (OBBB) was signed into law.¹ In addition to tax and spending reforms, this bill includes new policies sharply limiting student loan borrowing across graduate and professional degree programs. Effective on July 1, 2026, students borrowing federal loans for graduate programs will face a $20,500 annual cap and a $100,000 limit for all graduate-level programs, and students enrolled in professional schools (e.g., law and medical schools) will face a $50,000 annual cap and a $200,000 total limit. In addition to these new loan caps, the Graduate PLUS Loans program, which previously allowed students to borrow federal loans for educational expenses not covered by other financial aid, will be terminated.² Generally, federal loans for graduate school tend to be less generous than those for undergraduate education;³ they are unsubsidized, and the interest that accrues can result in larger debt. Recent changes in federal policy will further limit flexibility in student lending practices.

Limits on Student Loan Borrowing and Future Latino Lawyers

New changes to federal student loan limits, as illustrated by our key findings, are expected to limit enrollment in professional schools, disproportionately affecting students from low-income and marginalized backgrounds, especially Latino students, 84% of whom rely on federal loans to afford their education.⁴ The shortage of Latinos in the legal workforce is likely to worsen as tuition costs rise and new restrictive financing options limit access to law school. During the 2023 to 2024 academic year, the average cost of attendance for law school was $217,000,⁵ exceeding the $200,000 federal loan cap imposed by the OBBB. In 2025, Latinos represented only 6% of all lawyers nationwide, despite making up 19% of the U.S. population.⁶ New limits in federal student loans may lead Latino and other underrepresented students to choose between obtaining private loans with higher interest rates and fewer consumer protections, or abandoning their aspirations of becoming lawyers altogether.⁷

The Case for The Latino/a Lawyer

Increasing the number of Latino lawyers is crucial for ensuring the justice system better reflects the communities it serves. Additionally, Latino lawyers serve an integral role in increasing the number of lawyers who can offer cultural awareness and linguistic proficiency to a broad client base.⁸ Having a Latino Lawyer, who is more likely to speak Spanish, can make legal proceedings more accessible to clients with limited English proficiency. Bilingual lawyers can explain difficult legal concepts, provide emotional support, and connect their clients to appropriate resources in a language they understand.⁹ Latino lawyers are also more likely to work in nonprofit and government sectors, where they are more likely to serve low-income clients than in the private sector.¹⁰ Additionally, Latina lawyers who work in public interest report high levels of satisfaction in their roles because of their ability to advocate on behalf of vulnerable and underserved clients.¹¹ New federal loan limits threaten to reduce the number of future Latino lawyers and the value they bring to the field.

This data brief highlights key facts about how Latino law students financed their legal education during the 2019-2020 academic year using data from the National Postsecondary Student Aid Study (NPSAS). Note: Estimates with standard errors exceeding 50 percent of the estimate are not shown.

Key Findings

Key Finding 1: Latino students attend law schools that are less expensive than non-Latino students.

During the 2019-2020 academic year, Latino students attended law schools with lower costs of attendance than their non-Latino peers. Latino students attended law schools with a median annual cost of attendance of $42,000, compared to $59,000 for non-Latino students (see Figure 1). This trend reflects a common cost-saving measure made by Latino students to make higher education more affordable.¹²

Figure 1. Median Cost of Attendance for Law School by Latino Ethnicity, 2019-2020

Note: Cost of attendance includes tuition and fees, as well as total non-tuition expenses (e.g., housing, food, and books).
Source: LPPI analysis of the National Postsecondary Student Aid Study: 2020 Graduate Students.

Key Finding 2: Latino students report a greater reliance on federal loans than non-Latino students to finance their legal education.

More than four-fifths (84%) of Latino law students took out federal loans to cover their educational expenses for the 2019 to 2020 academic year, compared with 65% of non-Latino law students (see Figure 2). Latino students also borrowed larger amounts; the median amount borrowed by Latinos was $38,000, compared to $31,000 for non-Latinos. Large amounts of student debt can have long-term consequences for lawyers after graduation. Debt is found to be associated with poor mental health among lawyers,¹³ and can discourage legal professionals from living fulfilling lives, including postponing marriage, children, and buying a home.¹⁴

Figure 2. Share of Law Students Who Borrowed Federal Loans and the Median Amount by Latino Ethnicity, 2019-2020

Notes: Federal loan amounts captured in the figure include Graduate PLUS Loans and unsubsidized Stafford Loans. The reported median excludes data from students who did not borrow federal loans, reflecting only those who did.
Source: LPPI analysis of the National Postsecondary Student Aid Study: 2020 Graduate Students.

Key Finding 3: Latino students are more likely to borrow Graduate PLUS Loans than non-Latinos to finance their legal education.

Half of Latino law students (50%) relied on Graduate PLUS Loans to cover their educational expenses for the 2019 to 2020 academic year, compared to 41% of non-Latino students (see Figure 3). Latino students borrowed similar amounts as their non-Latino peers, about $25,000 and $26,000, respectively. Notably, as part of the OBBB, the Graduate PLUS Loan program will be terminated,¹⁵ leaving law students to search for new sources to pay for their educational expenses, including private loans, which have no fixed interest rates and limited forgiveness options.¹⁶

Figure 3. Share of Law Students Who Borrowed Grad PLUS Loans and the Median Amount by Latino Ethnicity, 2019-2020

Note: The reported median excludes data from students who did not borrow Graduate PLUS Loans, reflecting only those who did.
Source: LPPI analysis of the National Postsecondary Student Aid Study: 2020 Graduate Students.

Key Finding 4: Latino students are more likely than non-Latino students to borrow federal unsubsidized loans to pay for law school.

More than four-fifths (84%) of Latinos in law school reported borrowing unsubsidized loans (i.e., unsubsidized Stafford Loans) compared to 65% of non-Latinos (see Figure 4). The median amount borrowed was $20,500 for Latino and non-Latino students.¹⁷ In other words, students who borrow this type of loan generally borrow the maximum amount allowed. Federal unsubsidized loans are among the most common types of loans students borrow for law school because they are available to everyone, regardless of income. They often have low interest rates and have a six-month grace period following graduation before payments commence.¹⁸ As of July 1, 2026, loan limits for federal unsubsidized loans will be capped at $20,500 per year for most master’s and doctoral programs and $50,000 for professional doctoral degrees, including medicine and law. Moving forward, this will be the only federal loan option available for graduate students.¹⁹

Figure 4. Share of Law Students Who Borrowed Direct Unsubsidized Loans by Latino Ethnicity, 2019-2020

Note: The 2019-2020 loan limit for direct unsubsidized loans was $20,500 for graduate students, including law students.
Source: LPPI analysis of the National Postsecondary Student Aid Study: 2020 Graduate Students.

Key Finding 5: Latinos are less likely to receive grants to pay for law school than non-Latinos.

Less than half of Latinos (48%) attending law school in the 2019 to 2020 academic year received grants to cover their law school expenses, compared to almost three-fourths (72%) of their non-Latinos peers (see Figure 5). Of those who received grants, Latinos received smaller amounts, reporting a median of $15,000 in grants for the 2019 to 2020 academic year, compared to $19,000 among non-Latino students. Students are not obligated to repay grants, helping reduce their reliance on loans. With the enactment of the OBBB, grants will be a lifeline in reducing law students’ debt burden, especially for Latino students.

Figure 5. Share of Law Students Who Received Grants and the Median Amount by Latino Ethnicity, 2019-2020

Notes: Grant amounts captured in the figure include federal, state, institutional, and outside grants. The reported median excludes data for students who did not receive grants, reflecting only those who did.
Source: LPPI analysis of the National Postsecondary Student Aid Study: 2020 Graduate Students.

Key Finding 6. Latino students report a greater reliance on credit cards and less financial support from family than non-Latino students to cover law school expenses.

During the 2019 to 2020 academic year, Latino students were more than twice as likely as non-Latino students to use credit cards to pay for tuition and fees (33% vs. 16%; see Figure 6). Although credit cards are an accessible resource to cover educational expenses, high interest rates can quickly lead to crippling debt if they are not paid on time. Additionally, Latino students were less likely than non-Latino students to receive financial support from friends, family, and spouses while in law school (44% vs. 53%). This type of financial support can significantly reduce a student’s reliance on loans and long-term debt.  

Figure 6. Share of Law Students who Report Using Credit Cards and Receiving Financial Assistance from Family by Latino Ethnicity, 2019-2020

Note: Financial assistance from family includes spouses, partners, parents, guardians, friends, or family members.
Source: LPPI analysis of the National Postsecondary Student Aid Study: 2020 Graduate Students.

End Notes

¹Internal Revenue Service, “One, Big, Beautiful Bill provisions,” accessed April 29, 2026,available online.

²One Big Beautiful Bill Act, H.R. 1, 119th Cong., 1st sess. (2025),available online.

³SoFi, “Undergrad vs. Grad School Loans: Breaking Down the Differences,” accessed April 29, 2026,available online.

⁴LPPI analysis of the 2019-2020 National Postsecondary Student Aid Study.

⁵Melanie Hanson, “Average Cost of Law School,” Education Data Initiative, February 19, 2024, available online.

⁶American Bar Association, 2025 Profile of the Legal Profession (Chicago: American Bar Association, 2025), available online; American Bar Association, “Demographics,” ABA Profile of the Legal Profession, accessed April 3, 2026, available online.

⁷Amanda Wilkerson, “How the Budget Reconciliation Bill Fails Latino Students,” UnidosUS, September 19, 2025, available online.

⁸American Bar Association, “Diversity, Equity, and Inclusion (DEI) Center Frequently Asked Questions,” accessed April 3, 2026, available online; Jill Lynch Cruz, 2020, Latinas in the Legal Profession: Navigating the Cultural Divide, Hispanic National Bar Association, available online.

⁹Law Office of Javier Marcos, “Why Spanish-Speaking Attorneys are Essential for Immigrants,” accessed April 8, 2026, available online.

¹⁰State Bar of California, “Where Attorneys Work,” 2022 Diversity Report Card (San Francisco: State Bar of California, 2022), available online.

¹²Jill Lynch Cruz and Melinda S. Molina, Latinas in the Legal Profession: Exploring the Barriers to Success (Arlington: Federal Bar Association, 2017), available online.

¹²Cassandra Arroyo, Emily Labandera, and Deborah Santiago, How Latinos Pay for College: 2025 National Trends, (Washington, D.C.: Excelencia in Education, March 2025), available online.

¹³Meera E. Deo, “The Law School Pipeline and the Diversity of the Legal Profession,” Hofstra Law Review 53, no. 4 (2025): 945, available online.

¹⁴Melanie Hanson, April 8, 2026, “Average Law School Debt: Student Loan Statistics.” Education Data Initiative, available online.

¹⁵Adam Looney, Lauren Andrade, Constantine Yannelis, Phillip Levine, Dick Startz, Jason Jabbari, and Guangli Zhang, “How OBBBA Reshapes Student Lending,” Brookings, January 28, 2026, available online.

¹⁶AccessLex Institute, Guide to Private Loans (West Chester: AccessLex Institute, 2025), available online.

¹⁷LPPI analysis of the 2019-2020 National Postsecondary Student Aid Study.

¹⁸During the 2019-2020 academic year, the interest rate for unsubsidized Stafford Loans was 6.08%; Rene T. McNulty, “New Federal Student Loan Interest Rates for 2019-2020 Announced,” Consumer Finance Monitor, May 31, 2019, available online; UCLA Financial Aid and Scholarships, “Loans,” accessed April 6, 2026, available online.

¹⁹Law School Admission Council, “Paying for Law School,” accessed April 1, 2026, available online.

Acknowledgments

This brief was made possible with the generous support of the James Irvine Foundation. The authors thank Cinthia Flores and Belem Lamas for their valuable insights and review, and Angelina Wu for her design support.

The UCLA Latino Policy and Politics Institute acknowledge the Gabrielino and Tongva peoples as the traditional land caretakers of Tovaangar (the Los Angeles basin and Southern Channel Islands) and that their displacement has enabled UCLA’s flourishing. As a land grant institution, we pay our respects to the Honuukvetam (Ancestors), Ahiihirom (Elders), and Eyoohiinken (our relatives’ nations) past, present, and emerging.

Disclaimer

The views expressed herein are those of the authors and not necessarily those of the University of California, Los Angeles as a whole. The authors alone are responsible for the content of this report.

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Contact: lppipress@luskin.ucla.edu

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