The Department of Education has finalized regulations implementing the graduate and professional student loan limits enacted in the One Big Beautiful Bill Act, holding firm to a narrow definition of professional degree programs despite tens of thousands of critical public comments and bipartisan opposition from more than 150 members of Congress. The rule was published in today’s Federal Register today and takes effect July 1.
Under the final rule, only 11 fields—pharmacy, dentistry, veterinary medicine, chiropractic, law, medicine, optometry, osteopathic medicine, podiatry, theology, and clinical psychology—qualify as professional programs, giving students in those fields access to annual loan limits of $50,000 and an aggregate cap of $200,000. Students in all other graduate programs, including nursing, social work, physical therapy, occupational therapy, audiology, public health, education, and architecture, will be limited to $20,500 per year and $100,000 in total.
ACE expressed deep disappointment with the department's decision to dismiss widespread stakeholder concerns and emphasized the need for Congress to respond.
"It's a matter of how long it will take for Congress to act on this issue, and outside of that, we will have to see what happens in the judicial branch," said Emmanual Guillory, ACE's senior director of government relations, in comments to Inside Higher Ed.
ACE and dozens of other higher education organizations had urged the department in a March comment letter to broaden its definition significantly, arguing that the narrow list contradicts the statutory framework established in OBBB, which set a three-part test for professional status rather than a categorical list. Programs meeting all three criteria — completion of requirements to begin practice in a given profession, a level of skill beyond a bachelor's degree, and a requirement for professional licensure — were historically treated as professional programs by institutions and the federal government alike. The final rule effectively overrides that history.
Under Secretary Nicholas Kent has defended the department's approach, arguing that loan limits are intended to create downward pressure on tuition and prevent borrowers from taking on debt they cannot repay. ACE and its partners pushed back on that rationale in their comments on the draft rule, noting that the costs of health professions education in particular are driven by factors largely outside institutions' control, including clinical training requirements, specialized faculty, and accreditation standards.
The Impact on Student Borrowing and Workforce Pipelines
The stakes for students are significant. About 28 percent of all student loan borrowers currently need to borrow more than the new limits allow, according to ACE’s analysis. Students who cannot cover the gap through federal loans will be pushed toward private lenders, if they can qualify. Among graduate students who rely exclusively on federal loans, 20 percent have an adverse credit rating and 40 percent have a credit score below 620, making private borrowing difficult or impossible for many.
The impact is expected to fall hardest on students in health professions programs. Thirty-nine percent of students in master's-level health programs borrow an average of $28,500 more per year than the new limits allow; 67 percent of doctoral-level health students exceed the cap by an average of $26,700, according to research from the Federal Reserve Bank of Philadelphia.
The department appeared to anticipate litigation, writing in the final rule that it intends the professional program definition to be entirely severable from the remainder of the regulation.
In Congress, Rep. Mike Lawler (R-NY) has introduced the Professional Student Degree Act, bipartisan legislation that would codify an expanded definition of professional degree in statute, adding fields including nursing, physical therapy, occupational therapy, physician assistant programs, audiology, social work, public health, architecture, and education. The bill would not alter the loan cap levels established in OBBB and has 12 bipartisan co-sponsors.
ACE supports the Professional Student Degree Act and is urging member institutions to contact their congressional delegations before the July 1 effective date. ACE's Contact Congress tool is available to help higher education stakeholders communicate directly with their senators and representatives about the impact of the loan limits on students and workforce pipelines.