Come July 1, 2026, the financial blueprint for becoming a lawyer in the United States will be redrawn.
A new federal ceiling will limit loans for professional degree programs to $50,000 per year and $200,000 overall. For thousands of incoming law students, that cap slices straight through long-standing assumptions about how a legal education gets paid for.
Until now, federal lending often stretched to cover the full cost of tuition and living expenses. That flexibility kept private lenders largely at bay. But the new limit could reopen the door to private loans—often carrying steeper interest rates and fewer safety nets.
Administrators and financing experts say the ripple effects are already visible. Some admitted students are recalculating their choices. Others are reconsidering them altogether.
At the University of California, Berkeley School of Law, where tuition and living costs hover above $100,000 annually, federal borrowing averaged over $64,000 per student last year—well above the new cap. Officials there and elsewhere acknowledge that the full impact won’t be clear until the rule takes effect, but uncertainty itself is shaping decisions.
One incoming student, aiming for public service rather than corporate law, said private loans simply don’t fit into his future. Unlike federal debt, private loans cannot be cleared through Public Service Loan Forgiveness after a decade of qualifying work. That difference alone steered him away from certain schools. He ultimately chose the University of North Carolina School of Law, aided by a scholarship that removes the need for private borrowing.
Private Lending, Back in the Frame
Private student loans once played a larger role in legal education financing. But in 2006, federal policy expanded to allow graduate students to borrow up to the full cost of attendance. The result: private lenders faded into the background.
Now they may return to prominence.
Interest rates in the private market can range widely—roughly from 6% to 18%—and approval hinges on credit scores, debt profiles, and perceived earning potential. While law graduates from elite institutions often command high salaries, that trajectory is far from universal.
An analysis of federal education data shows that a quarter of ABA-accredited law schools had average annual federal borrowing above $50,000 last year. The University of Chicago Law School led the list, followed by the New York University School of Law and Columbia Law School. Graduates from these institutions reported median earnings exceeding $250,000 four years after graduation.
But not every school with high borrowing boasts similar outcomes. At California Western School of Law, average annual borrowing approached $70,000, yet median graduate earnings after four years were just above $100,000. Across the country, several other law schools report borrowing above the new cap while posting median incomes below six figures.
The mismatch matters. Private lenders tend to favor borrowers with strong projected earnings, which may leave students from lower-ranked schools—or those pursuing public-interest careers—at a disadvantage.
Schools Adjust Strategy
Law schools are not standing still.
At California Western, administrators anticipate applicants becoming more price-sensitive. The school is expanding scholarships and strengthening its part-time evening program, allowing students to work full-time and borrow less.
The University of Kansas School of Law has taken a different route. It launched an in-house loan program offering fixed 5% interest loans to cover costs beyond the federal cap. With in-state tuition under $27,000, only a small share of its students would need to exceed the federal limit—but the model signals experimentation.
Meanwhile, the Santa Clara University School of Law is guaranteeing $16,000 annual scholarships to all incoming students, pulling tuition below the new $50,000 ceiling. The strategy appears to be working: applications have surged well beyond the national average.
A New Era of Calculation
Roughly 43,000 incoming law students will feel the effects of the cap this admissions cycle. For many, the decision to attend law school will now involve more than rankings or location. It will require sharper arithmetic.
The federal limit doesn’t just constrain borrowing—it reshapes access. Students from wealthier backgrounds may absorb private loan risk more easily. Those without that cushion could find options narrowing.
The legal profession has long promised mobility through education. Whether that promise holds under a tighter lending regime will depend on how schools, lenders and students adapt when the numbers stop adding up the way they once did.
