The federal government has officially set student loan interest rates for the 2026–27 academic year, and the news is modestly unfavorable for borrowing families. Based on the May Treasury auction — where the 10-year note yielded 4.47% — the undergraduate direct loan rate will rise to 6.52%, up from 6.39% the prior year. Graduate unsubsidized loans will carry a 8.07% rate, and Parent PLUS loans will climb to 9.07%. Every loan type moved up by approximately the same 0.13 percentage points, a reflection of the slight rise in Treasury yields compared to last year's auction.

The increase may appear minor in isolation, but it compounds over time. For an undergraduate borrowing the full $5,500 annual limit at 6.52% on a standard 10-year repayment plan, total interest costs reach nearly $2,000 on that single year's loan alone. And families borrowing the full annual limit across four years face a meaningfully larger total debt burden than those who enrolled just two years ago. Higher education finance expert Mark Kantrowitz, who calculated the new rates exclusively for CNBC, noted that the rate increase arrives at a particularly precarious moment — just as the One Big Beautiful Bill Act eliminates several affordable income-driven repayment options.

The changes rippling through the loan landscape extend well beyond the interest rate adjustment. Beginning July 1, 2026, the Graduate PLUS loan program is being phased out entirely for new graduate students. Parent PLUS loans, while still available, are now subject to new annual and lifetime caps: $20,000 per year and $65,000 for the degree. For families who planned to borrow more than that ceiling through Parent PLUS, the gap must now be filled with private loans — which carry fewer federal protections, typically require a creditworthy co-signer, and come with rates that vary widely by lender and borrower profile.

MIT President Sally Kornbluth delivered one of the most direct public statements yet from a top university leader this week, telling students, faculty, and staff that federal policy shifts have caused a significant and measurable contraction in the university's research enterprise. Graduate admissions for the 2026–27 academic year are down 20% outside of MIT's Sloan School of Management and its Electrical Engineering and Computer Science master's program — a reduction of roughly 500 students. Federal research awards to MIT are down more than 20% year over year, and total sponsored research across federal and private sources has shrunk 10% from a year ago.

Two compounding forces are driving the enrollment contraction. The 8% federal endowment tax — levied on net investment income at the wealthiest universities under the tiered rate structure enacted by Congress — has pressured MIT's budget for more than a year. Federal grant flows have not rebounded even after Congress partially restored some funding in February. Without reliable grant income, faculty members are cutting the graduate students and postdocs who staff their labs. Kornbluth told the MIT community that many faculty have already scaled back their teams and research ambitions. The Washington Post reported that Kornbluth characterized MIT as doing "less research" and enrolling "fewer graduate students" as a direct consequence of federal action — a characterization the administration has disputed.

MIT is, by many measures, the first institution in the top research tier to publish concrete numbers tied to the federal grant pullback. The university's Washington office is lobbying on both sides of the aisle to revisit the endowment tax rate, and Kornbluth said MIT is pursuing new strategies to engage policymakers and the public about the downstream consequences — from medical research delays to a graduate student "brain drain" being actively recruited by peer institutions abroad. Similar enrollment contractions are expected at peer institutions that pay the 8% endowment tax, including Harvard, Yale, Princeton, Stanford, and a handful of others.

Sal Khan, founder and CEO of Khan Academy, announced this spring the launch of the Khan TED Institute — a new joint venture with TED and the Educational Testing Service (ETS) designed to offer a low-cost, AI-focused bachelor's degree. The program's first credential will be a Bachelor of Science in Applied AI. Total projected tuition for the entire degree: under $10,000. By comparison, tuition alone at Stanford is on track to exceed $67,000 next academic year, and Harvard's tuition is approaching $62,000. Khan announced the initiative at TED's annual conference in Vancouver and has since revealed major employer partners including Google, Microsoft, McKinsey, Bain, and Accenture.

The model is deliberately designed to challenge traditional higher education on multiple fronts. The program will be fully online, competency-based, and self-paced — meaning students progress by demonstrating mastery rather than accumulating seat time. Khan said students could complete the degree in three years or less, depending on their prior knowledge and pace. Admission pathways are intended to be broad, including completion of prerequisite work through Khan Academy itself or the free peer-tutoring platform Schoolhouse.world. The curriculum centers on three pillars: foundational academics (math, science, history, writing), hands-on AI expertise, and what Khan describes as durable human skills — communication, collaboration, and creativity.

The Khan TED Institute is targeting full academic accreditation and expects to open for applications within 12 to 24 months. Experts have noted that the accreditation timeline — not the curriculum — will be the critical bottleneck; without recognized accreditation, the degree's value to employers and to federal financial aid eligibility remains limited. Still, the employer partnership list is unusually strong for a pre-launch institution, and Khan's track record with Khan Academy has earned him significant credibility in education reform circles. The Chronicle of Higher Education called it "an early test of how artificial intelligence is reshaping the higher-education landscape — not just inside existing institutions, but outside them."

A federal lawsuit filed May 11 in the U.S. District Court for the Eastern District of Kentucky is seeking to block the state's restructuring of Kentucky State University — the Commonwealth's only public Historically Black College and University. Students, alumni, and prospective students are challenging Senate Bill 185, signed into law by Governor Andy Beshear in April, which declares a state of financial exigency at KSU and mandates the university's transformation into a polytechnic institution focused on STEM education, with the transition set to begin June 1. The plaintiffs are simultaneously seeking an emergency injunction to halt the law's implementation while the case is heard.

The lawsuit's central argument is that the financial emergency itself was manufactured by the state's own discriminatory conduct. Plaintiffs cite a September 2023 federal investigation that found KSU's land-grant funding had been shorted by approximately $172 million compared to Kentucky's other land-grant institution, the University of Kentucky. The complaint alleges that Kentucky violated Title VI of the Civil Rights Act of 1964, the Equal Protection Clause of the Fourteenth Amendment, longstanding federal desegregation obligations, and federal land-grant equity requirements. Attorney James M. Morris put it bluntly: "Kentucky cannot underfund its public HBCU for decades, receive repeated federal notice of that inequality, and then use the resulting financial condition as justification to dismantle the institution's historic mission."

KSU President Dr. Koffi Akakpo had sought to reassure students in March that no enrolled student would be forced to transfer, existing majors would continue for current students, and the institution would not become a two-year or community college. The university issued a statement indicating it was unaware of the lawsuit prior to its filing and is reviewing it with legal counsel. The outcome of this case could have significant implications for HBCUs nationally at a moment when federal civil rights enforcement infrastructure is itself under pressure — and at least 15 HBCUs are pursuing R1 research status with support from peer institutions including Harvard.

Instructure, the parent company of Canvas — the learning management system used by roughly 41% of U.S. higher education institutions — confirmed on May 11 that it had reached an agreement with the ShinyHunters hacking group following a two-stage breach that disrupted thousands of universities during finals week. The hacking group claimed it had stolen 3.65 terabytes of data covering 275 million users across 8,809 institutions. The breach exposed names, email addresses, student records, and other sensitive information. Canvas is used by many of the country's most prominent universities, including Columbia, Princeton, Harvard, Georgetown, Rutgers, Penn State, Northwestern, and the entire University of California system.

Instructure confirmed that it paid the ransom and received "digital confirmation of data destruction" along with assurances that customers would face no further extortion. The Chronicle of Higher Education reported that Canvas was fully back online by mid-May, but the incident has elevated urgent questions about data security practices across the higher education technology ecosystem. The breach hit during the most critical academic period of the year — finals week — creating disruptions to course submissions, graded assessments, and faculty-student communication at institutions across the country. The timing compounded the breach's impact significantly.

The Canvas incident follows a well-established pattern of ransomware attacks targeting higher education technology infrastructure, which has proven particularly vulnerable due to the volume of personal data held, the distributed nature of campus IT governance, and the relatively under-resourced cybersecurity postures of many institutions. For families with students currently enrolled or planning to enroll, the breach is a reminder that student data — including grades, enrollment records, and financial information — flows through a small number of third-party platforms that are now high-value targets for cybercriminal organizations.

The higher education landscape of 2026 rewards families who plan ahead, research thoroughly, and resist the gravitational pull of prestige at the expense of fit and financial reality. Loan rates are rising, loan programs are contracting, elite graduate programs are shrinking, and institutional stability can no longer be assumed. The families who navigate this best aren't necessarily the ones with the most money — they're the ones with the best information. That's what this newsletter exists to provide. Use it, share it, and act on it.