First I would like to say that I am only trying to offer constructive advice and nothing more to a game system I know many people love and make it better. I my self have no problem house ruling the system as we had created many custom rules back in the 90's to expand the core system to pure fantasy.
Second, I know why the game designers defined the 25 point quality rule as I have said when we used the system back in the 90's there were some crazy point builds and the GM had to step in a make some rulings. But all in all 99.98% were on the up and up. The other thing we tended to see was there often were qualities that were not chosen during PC creation or at all. Now I know that can be highly variable depending on your game style but I think if you do an analysis of your game you will find the exact same thing happening.
Lets say the GM decides on the following:
1) use life path for PC and NPC creation
2) Have qualities apply to limits
Game Effect Fluff:
Since Military Academy/College gives you Rank 20, then the academy would automatically reject any students with more then 6 points of positive qualities. So I think you can think of many qualities that the mil acad would like for its students to have and or select for; ambi dext and quick heal (IIRC 6 points), anti magic 3, etc.
If you go through mil acad then you cannot go on to another life path (job) that provides a positive quality above 5, ie no mil acad, tour duty then combat corr (as combat corr provides guts (11). Which again does not make a whole lot of real world sense.
Some fixes that might work:
1) Chose to ignore the qualities you want (but this does not make sense thematically or story wise, ie Role Play vs Roll Play)
2) As above but when you ignore a quality you do not spend the points for that quality, ie you get a rebate
3) create a list of qualities that do not apply to your 25 point total and define why they do not so others can make informed decisions on new qualities.
4) As 3 but have a more granular approach in that you can have some qualities that apply to your 25 point max but at a lower rate, ie for every 5 of Military Rank only points/5 apply to your 25 point total
5) Use a system in which you had a multiple applied to the cost of every quality beyond a specific point value and you start with the highest point costs first and go to the smallest at the end.
For example: Quality Multiple of x1 for qualities up to 25 points, for points between 26 and 40 x2, for 41-50 x8 and 51+ x16. So if you had qualities of the following point costs 12, 10, 10, 8, 8, 4.
You would compute the Karma cost as follows the 12 would be 12K as you are under the 25 point limit, then go to the next. 12+10=22 under the 25 point limit so cost is 10K. The next 12+10+10=32 over the 25 limit so cost is x2 for 20K. Next is first 8 for 12+10+10+8=40 for a cost of 8x2=16, next 8 would be at a total of 48 and cost 48K and the last quality of 4 points would put you at a total of 52 and cost 16K.
The total Karma cost for your 7 qualities (of 12, 10, 10, 8, 6, 6, 4) would be 12+10+20+16+48+16=112K.
Some math is involved but not burdensome IMHO when looking at the strait karma gen system in total.
I myself like the 3, 4 or 5 approach as it seems to fit what would happen in real life more, or more organic I would say but again the GM would have to approve every quality combination or even say no to some quality combination's for game and or story balance.
MDC