University of the Pacific President Warns of Workforce Shortages due to Federal Loan Changes
university of the Pacific President Christopher Callahan is advocating for state support for graduate and professional students following the federal government’s decision to eliminate the Grad PLUS loan programme for new borrowers starting in July 2026. This program, which has existed for nearly two decades, has been crucial in funding students pursuing careers in high-demand fields, particularly healthcare.
Callahan testified before the California Assembly Higher education Committee, representing the state’s self-reliant colleges and universities, to highlight the potential negative consequences of this change. He emphasized the program’s success – boasting a low 2% default rate and facilitating access to professions facing critical shortages – and warned that its elimination “poses a grave threat” to building a qualified workforce.
Nationally, Grad PLUS loans account for $20 billion in annual lending, with $2 billion going to California students. At Pacific alone, over 25% of students rely on these loans to fund their education in programs like dentistry, law, pharmacy, and health sciences.
Without Grad PLUS loans, students may be forced to turn to commercial lenders, a route inaccessible to those with lower incomes or credit scores. While Pacific and other universities are exploring risk-share models with lenders, this won’t help all students. Callahan fears this will lead to fewer professionals entering crucial fields and a less diverse workforce,limiting opportunities for first-generation and low-income students.
He urged state legislators to consider stepping in to mitigate the impact, stating, “Right now, Pacific and other schools have no solution for that group of deserving future health care professionals.” He believes state support is vital to ensuring California maintains a robust and diverse workforce in essential healthcare and other critical professions.
