Tabitha Brown
Grad school funding just got more complicated. New federal borrowing caps under the One Big Beautiful Bill Act mean students headed to graduate programs need alternatives like scholarships, grants, assistantships and work study to fill the gap.
What the New Law Changes for Grad Borrowers
President Trump signed the One Big Beautiful Bill Act into law on July 4, 2025, and it rewrites the rules for how graduate students pay for school. Starting July 1, 2026, federal unsubsidized loans for grad students will be capped at $20,500 a year, with a lifetime borrowing limit of $100,000. The law also phases out the Grad PLUS loan program entirely, which many students had relied on to cover costs beyond what unsubsidized loans allowed.
For students in expensive programs, law, medicine, business, that gap between the new cap and actual tuition costs could be substantial. Anyone planning to start or continue graduate study after mid 2026 should factor these limits into their financial planning now rather than waiting until enrollment.
Scholarships Worth Investigating
Scholarships don't need to be repaid, but they're competitive and usually tied to academic performance or other qualifying criteria. Several well known options exist for graduate students, including the Fulbright Program, the Rhodes Scholarship, the Marshall Scholarship, the Gates Cambridge Scholarship, the Hertz Foundation Graduate Fellowship, and the SMART Scholarship Program.
Eligibility varies by award, but common factors include financial need, academic record, extracurricular involvement, family background, career plans, personal essays and letters of recommendation. Financial aid offices at individual schools often keep lists of scholarships specific to a student's field, so that's a logical starting point. Search tools such as sallie.com, scholarshipamerica.org, and the U.S. Department of Labor's scholarship search can also help narrow down options based on background and area of study.
Grants and Need Based Aid
Grants function similarly to scholarships in that they don't require repayment, but they're typically awarded based on financial need rather than merit alone. A state grant might depend on family income, for example, while some universities offer their own grants to low income students or those who are first in their family to attend graduate school. The TEACH Grant and the Fulbright Graduate Grant are among the more recognized options in this category.
Comparing the Alternate Funding Routes
Each funding source comes with different tradeoffs around eligibility, work commitment and how much it can realistically cover.
| Option | Repayment Required | Typical Basis | Notable Tradeoff |
|---|---|---|---|
| Scholarships | No | Merit, background, field of study | Highly competitive |
| Grants | No | Financial need | Amounts vary widely by school and state |
| Work study | No (it's earned wages) | Demonstrated financial need | Part time hours limit earnings |
| TA/RA positions | No (compensation for work) | Program admission and department need | Adds teaching or research duties to coursework |
| Tuition reimbursement | No | Employer policy, job relevance | Often paid only after course completion |
Working Your Way Through Grad School
Federal work study remains available to graduate students who demonstrate financial need, and it applies whether someone is enrolled full time or part time. Jobs are usually on campus, though some programs place students with outside employers, sometimes in roles connected to their field of study. Contacting the financial aid office is the fastest way to find out what's currently available.
Teaching assistant and research assistant positions offer another path. These roles function as support jobs for faculty, and duties might include leading discussion sections, grading assignments or holding office hours for undergraduates. In exchange, many programs offer a stipend, tuition remission or health benefits, sometimes all three depending on the department and funding level.
Employer Tuition Reimbursement as a Funding Source
Some employers will cover part or all of the cost of a graduate degree, provided the program relates to the employee's current job. The details differ by company: some cap reimbursement at a set dollar amount per year, and many only pay out after coursework is finished rather than upfront. Checking with a human resources department is the only reliable way to confirm whether a benefit like this exists and what strings are attached.
Students will likely need to combine several of these sources rather than lean on just one, since none of them alone typically covers the full cost of an advanced degree. School financial aid offices remain the most direct resource for sorting through which combination makes sense for a given program and budget.
Ralph Fernandez
Alyssa Young