The 2024 College Cost Reduction Act (CCRA) proposed changes to federal higher education policy, including new annual and aggregate limits on federal lending, and elements of the CCRA might return in the 119th Congress. In this brief, I estimate the impacts of CCRA-like loan limits on master’s degree programs, where graduate borrowing is limited to the median cost of attendence (COA) within a program field. I find that the impact of loan limits varies substantially by state and by the type of institution housing the master’s program.

Why This Matters

Previous Urban Institute analysis suggests that around one in five master’s degree borrowers would be constrained by CCRA limits on borrowing. I expand upon this analysis by assessing where the effects of loan limits might fall more heavily on programs and students. Some programs will not have any students affected by the loan cap, and others might have a large share of students subject to loan limits.

Key Takeaways

Although my findings are subject to some degree of uncertainty, given data constraints, analysis of two different program-level datasets (i.e., the College Scorecard and a dataset developed by the Department of Education’s Office of the Chief Economist, or OCE) point to a disparate set of impacts across states and institution types.

• Students enrolled in master’s degree programs in Washington, DC, Oregon, Nevada, Arizona, and New Hampshire are most likely to be constrained by CCRA borrowing limits, while students in Utah, Delaware, Wyoming, and Alaska are least likely to be affected.
• Master’s programs housed within for-profit institutions, and those within historically Black colleges and universities, are also more likely to have students who are constrained by borrowing limits.

My analysis also highlights the lingering uncertainty around the effects of the CCRA loan limits, given the current data availability, and raises questions, including the following:

• Definition of field for COA. These results might be highly sensitive to how broadly or narrowly a field is defined to develop the median COA limit for annual borrowing. A median COA based on a narrow definition of a specific academic field will likely incorporate a different set of programs than a median COA limit based on a wider definition.
• Inclusion of part-time students in COA calculations. I develop the CCRA loan limits assuming COAs for part-time students are included. This means that in a field where most students enroll part-time, a master’s program offering full-time enrollment is more likely to be subject to the loan limit. If the median COA were limited to full-time students only, or reweighted to account for the mix of enrollment intensity at a given program, it is likely that fewer students will be subject to CCRA loan limits.
• Consideration of the potential for gaming. My analysis does not account for changes in the COA calculation or in institutional student aid packaging that might occur if these loan limits are implemented.

Methodology

I use median COA from the 2019-20 Graduate National Postsecondary Student Aid Study to generate a set of field- and program-level loan limits for master’s degree programs. I build a “loan limit index,” which provides a sense of how close each program’s aggregate borrowing amount, as reported in the College Scorecard and in the OCE data, are to the median COA, and to estimate what share of completers are borrowers. Broadly, a higher loan limit index means that a program has a relatively higher share of borrowers or a borrowing level that is closer to the estimated loan limit.