States Expand Student Loan Options Amid New Federal Borrowing Caps
As new federal borrowing caps take effect, several states are expanding their student loan offerings. These state-backed loans are being positioned as alternatives to federal loans, but consumer advocates warn they function more like private loans. States such as Connecticut, Massachusetts, Minnesota, Pennsylvania, and Rhode Island are increasing their loan options in response to federal limits. The new caps, introduced under President Trump's administration, restrict graduate students to borrowing $20,500 annually, with higher limits for certain professional degrees. State loans often have varying interest rates and may require high credit scores or co-signers, making them less accessible to some borrowers.