WashU Unveils Supplemental Loan Program
Donald Trump’s One Big Beautiful Bill lowered student loan caps for graduate students, effective July 2026. [1] The statute terminated the federal government’s longstanding Grad PLUS loan program and capped unsubsidized borrowing for graduate students. Generally, graduate students are now limited to $20,500 in unsubsidized loans annually with a $100,000 total cap. The statute carves out a higher limit—$50,000 annually and $200,000 total—for professional students. According to the regulation promulgated by the Department of Education, law qualifies as a professional degree, meaning that J.D. candidates face the $50,000 annual unsubsidized borrowing cap. [2]
A December 2025 report by PublicLegal ranked law school tuition for over 250 schools. Columbia topped the list at $85,368 per year, excluding room and board. [3] UVA out-of-state tuition ranked seventeenth at $76,396, and Washington University in St. Louis (“WashU”) closely trailed the Law School at $72,792. The one hundred most expensive law schools in the country all cost more than $50,000 per year in tuition alone, and eighty-five percent of law students graduate with debt. [4] On a national level, student loan debt has now outstripped credit card debt, totaling over $1.84 trillion. [5]
Students unable to cover their full tuition in the wake of the Big Beautiful Bill’s cuts might turn to private lenders. Such institutions offer fixed and variable rates ranging from below 3% to nearly 18%. [6] As one might imagine, these rates and accompanying fees may be prohibitive for many students. Unsubsidized rates for graduate and professional students, in contrast, have hovered in the 4–8% range for the past two decades. [7]
The WashU Law School administration reacted quickly to these new financial hurdles. In February, WashU Law announced its supplemental loan program, wherein law students can borrow up to $25,000 per year at a fixed 7.5% interest rate from the university itself. [8] “We’re very proud of it,” commented WashU Law Dean Stephanie Lindquist. The dean added that the administration looked at its students’ historical financial data after Trump’s legislation was enacted and realized that “we’re going to have some students who are going to need this,” whether for tuition, living expenses, or a combination of both. Private loans might prove a barrier to entry to law school, since they could entail navigating high rates, cosigners, and/or collateral. WashU’s central finance officers “mobilized to help” make the supplemental loan program a reality.
The supplemental loan does not require a credit check or collateral, nor does it include origination fees, guarantee fees, repayment fees, or points. [9] The central university selected the interest rate, which sits just below the current unsubsidized rate of 7.94%. Like federal loans, the supplemental loan begins accruing interest upon disbursement. Repayment is deferred six months after graduation.
Students need not apply separately for the loan, but are flagged for consideration based on their FAFSA and financial counseling. They are not required to identify the specific use of the loan—for example, distinguish between tuition and living expenses—to be eligible. Director of Financial Aid and Student Life Carrie Burns meets with each incoming student to discuss their financial planning. The supplemental loan will be “roll[ed] into” the larger financial planning conversation. Dean Lindquist shared that “we always counsel our students to take out the least amount of debt possible.” The school plans to take what Ms. Burns described as a “very hands-on approach” to the supplemental loan program.
When asked about how the school would address delinquencies or defaults—and whether it planned to employ a collections agency—Ms. Burns shared that “we would be able to find some sort of solution.” Ms. Burns added that “our . . . default rates are really, really low.” WashU’s employment statistics could bear out such expectations, as the school sends a significant portion of its graduates to lucrative private sector positions. PublicLegal reported a median salary of $205,000 for WashU law graduates, and nearly half of the 2025 graduating class obtained positions at firms with over 500 attorneys. [10] That said, a number of graduates flocked to expensive regions in 2025: fifty-six students took the New York bar, twenty took the California bar, and fifteen took the D.C. bar. [11] Students may also have debt from undergraduate institutions, as well as non-academic debt and other financial obligations.
Institutional debt—funds owed to one’s educational institution instead of a separate lender—may not be the norm, but it is not unheard-of. It can be as relatively benign as an overdue library book fee or a campus parking ticket. Or, institutional debts can be more significant: some universities have reported that Pell grant recipients who withdraw before completing 60% of a given semester end up owing the school a portion of their grant funds. [12] When students withdraw before the 60% mark, the federal government claws back a portion of the grant money from the school. The school, in turn, pursues the student for that balance. Although this dynamic arises from Title IV financial aid, studies about how schools manage these debts are worth bearing in mind, despite confidence in law school graduates’ ability to repay debt.
Lending-focused nonprofit Protect Borrowers studied institutional debt in the California state post-secondary school system. It focused on accrual of institutional debt post-COVID, as the pandemic exacerbated mid-semester withdrawal rates. [13] According to the report, Protect Borrowers estimates that $195 million in institutional debt has accrued annually in the California systems since the pandemic. [14] The report calls for schools to change how they adjudicate outstanding debts, recommending that campuses avoid using private debt collectors, who recover only a small portion of the outstanding debt and may subject students to additional hardships, including lawsuits. [15] The report also warns against preventing students with institutional debt from reenrolling. The Institute for College Access and Success echoed concerns about aggressive debt repayment incentives, advocating against the use of degree or transcript withholding, garnishment, and readmission bars. [16]
Education nonprofit Ithaka S+R, in concert with the Ohio Department of Higher Education, ran a three-year institutional debt repayment program involving eight Ohio colleges and universities. [17] The program allowed students with at most $5,000 in institutional debt to reenroll at a state institution of their choosing. The college of reenrollment would subsidize repayment of a portion of the outstanding debt at a rate higher than the expected recovery by a professional debt collector. [18] Over the course of three years, more than 700 students had reenrolled, over $600,000 in debt was resolved, and tuition revenue exceeded $2 million. [19]
These studies of particularized undergraduate institutional debt may turn out to bear very little upon lending to law students. That said, the Big Beautiful Bill not only capped unsubsidized loans but also eliminated deferment and forbearance for borrowers who have encountered economic hardship or who are experiencing unemployment. [20] Furthermore, as students may need to juggle multiple outstanding debts, both from undergraduate studies and from alternative borrowers to cover their graduate tuition, they might be faced with decisions about which debts to prioritize.
WashU’s loan program has the potential to enable a transformative, highly valuable education for incoming students. In the face of destructive federal legislation, WashU led the charge to find a way to keep its doors open to students who might not otherwise be able to attend. The loan program is brand new, though, and as is the case with any lending program, it risks saddling students with an obligation that they are not equipped to repay. While law schools can take any number of measures to prepare their students for financial stability, one starting point is a commitment to avoiding some of the pitfalls of existing institutional debt systems highlighted by the California and Ohio studies. Debt collection—rare as it hopefully will be for WashU and any other schools that follow its example—need not, as the Ohio study revealed, be punitive.
Ms. Burns shared that “a lot of schools” have reached out to her about the program. Time will tell whether other schools follow suit. Hopefully, the Big Beautiful Bill’s damage to historic loan programs will be reversed, and measures such as the supplemental loan program need only be temporary.
3. https://www.ilrg.com/rankings/law/tuition/1/desc/Tuition.
6. https://educationdata.org/average-student-loan-interest-rate.
7. Id.
9. Id.
10. https://www.ilrg.com/rankings/law/median.
11. https://law.washu.edu/wp-content/uploads/2026/04/EQSummary-188-03-31-2026-12-41-15.pdf; https://law.washu.edu/wp-content/uploads/2026/03/ConsumerBarAdmission-188-03-02-2026-11-42-35.pdf.
12. Eaton, C. et al., Creditor Colleges: Canceling Debts that Surged During COVID-19 for Low-Income Students at 7-8 (Mar. 2022), https://protectborrowers.org/wp-content/uploads/2022/03/Creditor-Colleges.pdf.
13. Id. at 2.
14. Id.
15. Id. at 14—15.
17. https://sr.ithaka.org/access-and-attainment/the-ohio-college-comeback-compact/.
18. https://sr.ithaka.org/publications/second-chances/.
19. Supra note 17.
20. https://ticas.org/affordability-2/2025-student-debt-survey-blog/.
