Note This transcript was produced by a third-party servicer.
Mushtaq Gunja: Hello everybody, and welcome to another episode of dotEDU, the public policy podcast from the American Council on Education. I'm your co-host, Mushtaq Gunja. I'm here with my friends, my co-host, Jon Fansmith, Sarah Spreitzer. How are you guys? Happy new year.
Sarah Spreitzer: Yay.
Jon Fansmith: Happy new year.
Mushtaq Gunja: Oh, it's going to be a good one. People. Where's the energy?
Sarah Spreitzer: I was thinking that the first week back, but we're now in the second week of 2026, and it's just been too much already.
Jon Fansmith: Yeah.
Sarah Spreitzer: I was really optimistic last week, but this week not so much.
Jon Fansmith: Sarah knows. I've been doing some meeting where I keep trying to pump up the good news to start the year off with the right... And what I've realized is that all of the good news is purely personal, like people getting engaged, people doing this, which is nice. It's great. It's very good news. But I think you're sensing our professional enthusiasm is already waiting.
Mushtaq Gunja: Oh, no. Friends, I am super optimistic. I love this time of year.
Sarah Spreitzer: Oh, good.
Mushtaq Gunja: It's the beginning of the school year. Classes have started again. It's going to be a better year than last year. I mean, last year was tough, and this year, it's bound to be better. And we're going to talk about, well, maybe not some ways in which it got better, but we're going to tackle a few issues today.
We're going to talk about the status of appropriations. We're going to talk about some recent DOJ guidance, a finding potentially on the constitutionality of some MSI programs. I want to talk a little bit with you all about the status of negotiated rulemaking. And then, excitingly, in the second half of the episode, we have the president of the American Association of Nurse Practitioners, Valerie Fuller, to talk a little bit about the impact of the recent negotiated rulemaking on nursing and our nurse practitioners. So it's going to be a really good episode.
And friends, I'm going to have to figure out a way to be able to get you guys optimistic for the rest of the year. I mean, Jon, is this because the Eagles lost? Is that why you're so down? I mean, my Rams are still in it. You have somebody to root for.
Jon Fansmith: I was depressed already, Mushtaq, on just the narrow focus we were talking about. And then you had to go and kick me while I'm down. Yeah, I mean, that doesn't help, obviously. Although I guess on the plus side, I don't have to watch them play anymore, which was downright painful this year. So I guess that's the blessing out of the curse.
Sarah Spreitzer: And I thought that our New Year's resolution was no sports talk for the podcast. That's for your guys' side podcast, sports talk with Jon and Mushtaq. That maybe-
Jon Fansmith: We should have a side podcast.
Sarah Spreitzer: ... comes after this podcast.
Mushtaq Gunja: We should do that, Jon.
Jon Fansmith: We should.
Mushtaq Gunja: It wouldn't be the same. As somebody once told us recently, there's no spice without Sarah Spreitzer.
Sarah Spreitzer: That's right.
Mushtaq Gunja: So it really wouldn't work. Okay. Hey, two things before we start. First, our annual meeting, ACEx, is coming soon, friends. And if you haven't registered, and you have the ability to do so, I mean, please do. I was just looking at the agenda this morning. I mean, it is a good conference, content-wise. I mean, we have Arne Duncan and the former ambassador to Hungary in conversation. We've got Greg Lukianoff from FIRE and Zakiya Smith Ellis from Ed Council. They're doing TED Talks. We have a session with Nicholas Kent, our new undersecretary. I'm doing a Carnegie session. Jon's doing a government relations session. Sarah, Jon, and I are doing a live podcast. It is going to be fun. It is going to be good. Another reason to be optimistic for this year. If you do come, please introduce yourself and Sarah. We'll have team Sarah shirts for all of you.
Sarah Spreitzer: Yes.
Mushtaq Gunja: Well, no, that's too much.
Sarah Spreitzer: We'll throw them out.
Mushtaq Gunja: But she will be smiling and willing to say hi to everybody, so that's good. Hey, second announcement in my world of Carnegie classifications. We released the 2026 elective classification for community engagement this past Monday with a campus list. And if you don't know, through an application process, we recognize institutions that have an extraordinary commitment to, in this case, community engagement, but we also have an elective classification around sustainability and around leadership for public purpose.
So we have some 230 campuses that receive the community engagement classification. I'll put a link to the release in the chat. But I mean, to those institutions, super well done. Shout out to these very deserving campuses. It takes a lot of work to apply. It's a significant accomplishment. So well done.
Okay, friends, let's talk appropriations. So I think I put this out of my mind over the holidays. Hopefully our listeners did too. But I will recall that we had a shutdown for 47 days or something, longest shutdown in history. It ended in mid-November. And we were set off on a continuing resolution. If my math is right, it's set to expire soon. Jon, Sarah, what do we know? And most importantly, am I going to have to mediate another fight between you two about whether we're going to have another shutdown?
Sarah Spreitzer: So I won't get to the shutdown yet, but I will say this is actually in the good news category. I mean, we actually have Congress doing something. I mean, they're really running out of the gate at the start of 2026. They may lose speed pretty quickly. This may go off the rails. But last week we saw them pass what they call a minibus, which is a package of three appropriation bills. So remember, after the shutdown, or before the shutdown, they had passed three bills, which included agriculture, transportation, and HUD.
This next package that they did, because there's 12 appropriations bills, they passed Commerce Justice Science, Interior, and the Department of Energy. And CJS, or Commerce Justice Science, includes funding for the National Science Foundation, which many of our institutions care about. The president had requested a 57% cut to that budget. So it would've gone from an $8 billion agency down to a $3 billion agency. Congress, in a bipartisan fashion, rejected that proposed cut, and they included 8.75 billion. It's slightly below the previous years. It's about a $300 million haircut.
But to me, I think that that's a great sign that Congress is kind of saying, we want to get back to certainty on funding for these national priorities. They also restored funding for the National Endowment for Humanities, which was an agency that the White House was advocating or was pushing to really sunset. And so they provided level funding, $207 million, for the NEH, and I thought that was really good news. For those of you that follow indirect cost rates, the bills included blocking language within CJS and the Department of Energy. Now-
Mushtaq Gunja: What is blocking language, Sarah?
Sarah Spreitzer: Oh yeah. So blocking language basically says that the White House cannot suddenly announce a 15% cap to our indirect cost rates for our federal grants. And so, at least for CJS and the Department of Energy, that was good news.
Now, the next package that they're considering that the House is likely going to vote on, I think either today or tomorrow includes, and why am I blanking here, Jon? It includes financial services and general government, FSGG. It includes Department of State, and it may include the Department of Homeland Security. Obviously, the Department of Homeland Security, there are a lot of political concerns. There's a lot of discussion about ICE and how much you fund Department of Homeland Security, given some of the actions that they've been taken.
But within the State Department bill, Congress also restored funding for the Fulbright Program. That was another program where the administration had asked for very deep cuts, and they also included in the report language, some general language directing the Office of Management and Budget within the White House to stop any actions that would change our indirect cost rates, and also limited their ability to propose changes to uniform guidance.
And so I don't know, it's an interesting move for a Congress that really hasn't pushed back much on this administration. I will say right before this started, I did look to see if the president had signed that minibus into law. He has not yet signed it. But I assume that since it passed Congress with bipartisan support, he will.
Mushtaq Gunja: One thing I did not hear was funding for Labor, HHS, Education. Where's that and how close are we on all the education spending?
Sarah Spreitzer: I mean, that's Jon's bill, so I care less. No, I'm just kidding. I do care about that bill.
Jon Fansmith: That's my bill.
Sarah Spreitzer: But yes, that's going to be the last one, along with Department of Defense.
Jon Fansmith: Yeah, they're going to do another minibus next week, Transportation, Housing and Urban Development, or T-HUD or THUD. I like that. Labor, HHS, Education, and Department of Defense. And there's lots of reasons why those will be the last three out the door. Defense and Labor H tend to be some of the most complicated bills to advance because they are the biggest bills and because there is a lot of policy language that goes into them, especially Labor H.
And one of the ones actually that is probably causing problems, Sarah, I think highlighted what was really interesting is that a lot of the funding levels are either at the Senate's level or closer to pretty broad rejection of the president's request for cuts, but it seems like the funding levels won't be the problem. It will be some of these policy pieces.
And for Department of Ed, we know there's a lot of Congressional concern, in both parties too, this is not purely Democrats versus Republicans, about the administration's efforts to cut down the Department of Ed by outsourcing it through these interagency agreements that they announced in the fall of last year. So language that would bar the administration from doing that, language that would bar the administration from shifting funding or canceling funding.
And frankly, today we saw an announcement from the federal government terminating nearly $2 billion in federal grants for mental health and substance abuse treatment programs. This is the kind of thing, especially that money goes directly to these efforts in different communities. Members of Congress are going to see that. They're going to hear, if they're not already, from their constituents. And I think to Sarah's point, there's a lot of Republican members of Congress who are going to look at this and say, it's one thing when it's DOGE, it's one thing when it's something else. This is going to cost me votes in a midterm year. We need to figure out and maybe pull back whatever authority we've given the president to do those kinds of things.
Sarah Spreitzer: And Jon, the last two minibuses have had a lot of language in there that says the administration will not reallocate funding as is included in those funding bills. I mean, I don't ever remember seeing that language before. And it will be interesting to see if that gets taken up by the courts. So if they do move ahead with terminating some programs, and it's spelled out in the bill that they need to inform Congress or work with Congress or follow Congressional instructions, that will be very interesting. And I know one of the issues they were talking about on the Labor H bill was that the Democrats wanted to include language that Secretary McMahon couldn't create any more interagency agreements without informing Congress, or spending funding on creating these interagency agreements as a way to start shutting down the Department of Education.
Mushtaq Gunja: So Jon, Sarah, what's still up in the air? So it looks like, Jon, you said the education bill will come, they're working on the minibus for next week. I think funding runs out January 30th. Are they going to have enough time to be able to do this? What are we hearing about that? And are there any other places where the campuses should push, should be really contacting representatives, et cetera?
Jon Fansmith: I mean, you should always be contacting representatives to reinforce the importance of these programs. There are times where that's more critical than others, but it's never a bad thing to do. The one thing about it is we will see this bill language. The package they're looking at this week was shared publicly on Sunday night. Their goal is to try to get it ahead of the start of the next week so that they can move the floor action quickly.
I don't know. I mean, maybe you did, Sarah. I think a lot of people, including myself, have been surprised how smoothly and efficiently they've been moving through these bills. Homeland Security, really the biggest hiccup, and that of course wasn't something Congress could predict. And to that point, the language around asserting Congressional control over that agency, limiting its functions, at least subjecting them to review, that seems to be the biggest hole.
But even there today, if you read the accounts, appropriators are saying, "Look, we think we can work this out. We think we can get that over the finish line." And it's been surprising, but it's also, again, it's a midterm year. This is the one must do thing they have to do before the elections. Shutdown's not great politically. They might be racing out of the gate in part because they're planning on coasting for the second half of the year.
Sarah Spreitzer: Yeah. I mean, I think it's very, the appropriators have done a really good job of working through these issues and bringing people on board. We should also mention that all of these bills seem to have the earmarks or Congressionally directed projects that were included in the bills. And of course, that's like an old school tactic to get people to vote for the bill. You may not like what else is in the bill, but if it has funding for your district, you'll vote for it.
But I find it really interesting that this is finally Congress pushing back a bit on this White House. And I think it comes down to a lot of, it's not a real public thing where they're saying we don't agree with President Trump's platform, but what they're saying is we don't agree with the Office of Management and Budget. And that's been how it's been kind of characterized.
Jon Fansmith: And just one quick thing on that point. I mean, the packages are passing with margins like in the House 348 to 27. Sarah's point's a really good one. Because you're one of a whole bunch of members who have effectively broken with the administration, but it's not a public rebuke. You're not saying, "I disagree," but you're making choices and supporting them that effectively are challenging the administration's agenda.
Mushtaq Gunja: Okay. Well, we'll keep an eye on this. Certainly we'll revisit in a couple of weeks. Let me move us to the constitutionality of some of these MSI programs and the grants. So at the end of last year, we learned some distressing news from the Department of Ed regarding the constitutionality of some of these MSI programs.
Just to set the scene, right last year, Jon, Sarah, correct me if I'm wrong, the State of Tennessee sued the Department of Education around some HSI grants claiming that it was unconstitutional, race discrimination to designate money for schools based on the racial enrollment of their students. You'll recall that the Department of Education agreed with Tennessee that the grants were unconstitutional. So we're in this weird position when the plaintiff is agreeing with the defendant. But that doesn't necessarily end the lawsuit because our federal system allows for intervention by parties that could or would be harmed by a ruling.
HACU tried to intervene. The courts have not yet ruled on that intervention. Okay. Apparently last fall, the Department of Ed asked for a legal opinion from DOJ, their Office of Legal Counsel, on the constitutionality of a whole slew of other grant programs that are based on the racial characteristics of their students. Jon, what did OLC's decision say? Where are we?
Jon Fansmith: Yeah, and I think it's not a shock. What the Department of Justice Office of Legal Counsel prepared in about a 40-page memo to the acting general counsel at the Department of Education essentially said that, "Look, we share the viewpoint." And it's worth noting Students for Fair Admissions was one of the parties to the Tennessee suit, along with the government of the state of Tennessee. "We agree with this position, these are racially discriminatory. They fail the test that they do not confer a benefit based solely on race."
And then they went through the bulk of the memo is essentially looking at individual programs, and saying, do they pass the test? Do they fail the test? And then going into, and I'm not going to go too deep into the issue of severability, can you remove those components related to race from the programs and maintain the programs, or are they so inherently based on that racial calculation that the programs themselves have to be eliminated?
The Department of Education has essentially said very publicly based on this information, our position is that we cannot legally allocate funds to these programs. These are overwhelmingly programs in Title III and Title V of the Higher Education Act. It's worth noting Congress passed them into law. They were signed into law. They have been amended multiple times in the past by different Congresses and administrations, both Democrat and Republican. This is very much out of the norm.
It's also worth noting that Students for Fair Admissions, I am not a legal scholar, correct me if I'm wrong, Mushtaq, but it did not speak to the idea of these sorts of programs. This is another example of this administration taking a decision that was relatively narrow in scope and expanding what its meaning could be to broad areas of higher ed policy. The one other group outside of Title III and Title V is some of the TRIO programs, the McNair and the Student Support Services programs were also ruled to be discriminatory, and so those programs would not receive funding as well under the department's calculation.
I also want to say on this one, this is probably flying under the radar way more than it should. This is the kind of thing we talked a lot, and I think there was a lot of attention paid, to at the end of last fiscal year when the administration took the money away from the Title III and Title V program, zeroed the amount and transferred that money to other areas, including HBCUs and tribal colleges. But the idea of declaring a range of programs, again, in law for decades in some cases, as illegal and saying, we will not follow Congress's intent here, we're in the appropriation cycle. It is very likely Congressional appropriators will reallocate money to those programs with the idea that the administration will be putting it in. And I see Kim Jones understandably is correcting me on student services. So check the chat. I'm being fact checked in real time, which is great.
We have just had this whole conversation about Congress asserting its will, and through appropriations trying to check the administration. This is, in a lot of ways, the nuclear option of that conflict. The administration is explicitly saying programs are unconstitutional, illegal, we won't fund them. Congress is saying they're important, and in the statute, you will fund them. So there will be courts intervening. There's lots of things, shoes yet to drop in this case, but this is pretty significant stuff.
Sarah Spreitzer: Yeah. And I would say, Jon, I don't doubt Congress won't fund these programs. There's so much Congressional support. As you said, they've reauthorized these programs many times. So what does that mean if it passes and they've provided funding for HSI programs and other MSI programs? I mean, that does set it up for an interesting court challenge.
Mushtaq Gunja: Well, it does because I mean, let's grant just for a second that these are dollars that are based on race in some way. That doesn't end the inquiry. I mean, reading the DOJ opinion, I mean, they understand that there's a framework here where if there is some discrimination that is based on race, which is what Ed and DOJ are alleging here, that doesn't end the inquiry. It's just that any such program must be subject to what is called strict scrutiny in the law, which requires a significant and a heightened governmental interest.
Congress over and over and over passing these laws and passing them in the wake of this ruling, if they do indeed do this in the next couple of weeks, I mean, it will be a pretty significant indication about the interest that at least Congress feels. This is done on a bipartisan basis, especially it'll be really interesting to see what the courts do here. Because remember, I mean, this is a OLC DOJ opinion. It's very much written as if it is a court opinion. It is not. The court's Article III judges will have to get involved here. So there's a lot left here for us to be able to think about and have resolved. Though it is, again, very difficult when plaintiffs and defendants, when the grantors are going to be both judge and jury, which is how they've set this up right now. Go ahead, Jon.
Jon Fansmith: Just two points. And before we move on, one, to your point, the Supreme Court has, throughout the last year, repeatedly said we're giving the administration broad authority where there's not clear Congressional intent. They've essentially asserted that as a reason for why they have, again and again, deferred to the administration's actions. Your point, there is abundantly clear Congressional intent around these programs. So to the extent that they're following their own metric, if it gets to the courts, there's a very plausible argument for sustaining these programs too.
And before we move on, it's also worth noting, we've talked a lot about the procedures, the debate, the framing of it. These are very important programs that provide a benefit to all of the students on the campuses to which that funding goes. These are traditionally institutions, in large part because of the populations they serve, that need additional support to give an equal opportunity to their students. We sometimes get lost in the policy side of it. There's a bigger purpose to what these programs do and why they are important that isn't just the terms the administration would like to talk about them on.
Mushtaq Gunja: Sure. Okay. We're going to talk about this, I'm certain, next time as well. Can I just quickly have you guys hit on the latest negotiated rulemaking before we circle back around and talk about the RISE committee, and then bring in our good friend, Valerie Fuller, in. But Jon, consensus was reached at the latest negotiated rulemaking, this AHEAD committee, which I think has this funny acronym. You're going to tell me what it is, just like Accountability in Higher Ed and Access something, something, Demand something.
Jon Fansmith: Accountability in Higher Education Access Through Demand-driven Workforce Pell.
Mushtaq Gunja: Yeah.
Jon Fansmith: Rolls right off the tongue.
Sarah Spreitzer: And when we say-
Mushtaq Gunja: The PATRIOT Act also has something, like has some acronym that it stands for, but... Okay, Sarah, hold on. I'm just going to ask you, what happened? What was the consensus that was reached?
Jon Fansmith: Yeah. So a consensus on all of the issues brought before the rulemaking committee, they met in two different sessions, each a week long. First one was in December. They looked at primarily the changes to Pell Grants, particularly the expansion of Pell eligibility to short-term or workforce programs. It's a lot to unpack there, but I'll say broadly, I think given how prescriptive the statutory language was in that area, that was a less controversial discussion.
The second part, which ended last Friday, was probably always going to be one of the more controversial ones because it dealt with the accountability, the new accountability metrics. A couple other things in there, but the accountability side was the biggest piece in part because, first major substantive Congressionally directed change in law around institutional accountability, although it's at the programmatic level, but also because it allowed the Department of Education to roll in the gainful employment financial value transparency regulations that they've had on the books, essentially with the goal of creating one sort of accountability metric, which would be based on earnings.
Two things I think are the highlights from this. Again, we can go into questions and talk about the details more, but the things that I think were somewhat unexpected based on where we started, the Congress, when they passed OB3 said that the provisions would apply to programs, and programs failing an earnings test, essentially graduates four years out in the workforce have to earn more than high school only employed people 25 to 34 if it's an undergraduate program, BA recipients 25 to 34 in the state if it's a graduate program. And if you fail that test two out of three years, you lose eligibility for federal student loans only.
When it got to the committee, this expanded. They added the idea, a couple of people on the committee, negotiators, added this idea that we shouldn't be sending any Title IV funds to failing programs. Not just eliminating the ability to borrow loan, but getting rid of any Title IV access. And that picked up. And so that provision was added that failing programs would be excluded from Title IV eligibility.
But it was qualified by something entirely new, which was adding a second test. So you have earnings tests as sort of the first calibration. If a program fails the earning test, there's something that I've been calling the 50-50 test, somebody else will come up with something better. But essentially, if you're at an institution where either 50% of your Title IV funds are going to failing programs, or at an institution where 50% of your Title IV recipients are enrolled in failing programs, then that is when the broader application of total Title IV eligibility would be applied. So you can fail the earnings test and still only be subject to the loan limitation. It's only if you fail the earnings test and the 50-50 test that you would be subject to the full Title IV block.
That's a big expansion. It also essentially rolled gainful employment in. Practical effect of doing that was to put certificate programs, which were not in the final reconciliation bill, under the same rubric. And I think that's the one where when you start to think about programs that will probably struggle to meet these tests, you're going to look primarily at certificate programs. I think it's less likely you'll see a lot of failure across AA, BA, graduate level programs.
Mushtaq Gunja: Jon, what have we found when we've run the numbers? What percent of programs are affected? What percent of students in our higher ed ecosystem might be effected?
Jon Fansmith: So as of now, I don't think we've run the numbers on what that looks like, in part because this was not resolved until Friday afternoon. There was a real push to get consensus, a little bit of strong arming one of the likely holdouts, and a lot of this resolved really much at the end of the process.
During the negotiated rulemaking, there was some research introduced by one of the negotiators that they'd done their own calculations. Preston Cooper who's at AEI, he's done exercises like this before. And I think the estimate was something like 2 to 3% of all students would be in programs that would fail, and that would be annually about a billion dollars of Pell Grant money that would be saved for taxpayers. I can't speak to that. A billion dollars annually is a huge percentage of overall Pell funding, even assuming these are full Pell recipients, it'll be hard to see how you get there. But as far as numbers, those are the only ones I've seen so far. I know that we have some fine and talented people here who are going to be digging into that, if they're not already, and hopefully have stuff to share with our audience later.
Sarah Spreitzer: So I was just going to add, Jon and Mushtaq, quotation marks around consensus. Because I think several of the things that the department did around this negotiated rulemaking sessions, the two sessions were interesting, including the way that they reached consensus by telling negotiators that perhaps everything they negotiated wouldn't be in the final package unless they voted for consensus. And then how they made up the negotiated rulemaking panels was also interesting, not including financial aid officers on the first panel when you're talking about Workforce Pell.
Mushtaq Gunja: It's a really good point. And maybe we can come back to this, but I was hoping that we might be able to bring in our good friend, Valerie Fuller, into the conversation now. And as she's coming on, let me just introduce her. So Valerie Fuller, president of the American Association of Nurse Practitioners. She's a practitioner herself. Valerie, correct me if I'm wrong, but I think you're in the Department of Surgery at Maine Medical Center in Portland, and also maybe an assistant professor at Tufts. I mean, it seems like a lot of jobs, Valerie, and you're still smiling. And again, Jon and Sarah, if she can be smiling, then obviously all of us can be optimistic about our time. So Valerie, welcome to the podcast. Welcome to dotEDU.
Valerie Fuller: Thank you. Thank you. Thanks for having me.
Mushtaq Gunja: Yeah, absolutely. So we spent a little time talking about the AHEAD committee. That was the second of the two negotiated rulemaking sessions, but the first of these was this RISE committee that had these changes to the loan programs and to possible amounts that folks can borrow, that our students can borrow. Extremely impactful. And this affects a lot of students, a lot of prospective students. Valerie, Jon, I mean, do you want to just remind our audience what the consensus was reached in that RISE committee?
Jon Fansmith: Yeah, and maybe it helps if I do the broader picture and Valerie can step in on that.
Valerie Fuller: Sure, absolutely.
Jon Fansmith: Yeah. So the RISE committee was tasked with doing all the student loan pieces from the reconciliation bill. And probably the biggest, and as we're going to talk a lot about, the most controversial piece was this establishing loan limits for graduate programs. They did not change anything about undergraduate loans in the reconciliation bill, but they did a lot in the graduate space. But there were other provisions in there around parent plus loans, around repayment plans, a number of things that that committee worked on. But without question, the issue they spent the most time on was this idea of defining what a professional program is and what a graduate program is. And maybe with that set up, I'll hand it over to you, Valerie.
Valerie Fuller: Thanks, Jon. Yes, thanks for that setup. So passage of the One Big Beautiful Bill Act, as you know well, did a couple of things. It eliminated the Grad PLUS loans, and it also created these new federal loan limits for graduate students and professional students. So for graduate students, it will be an annual cap of 20,500 annually and a $100,000 cap. And for professional students, it'll be 50,000 annually with a $200,000 cap.
And during this proposed rulemaking process, the Department of Education excluded nursing, and including nurse practitioner programs from the professional category. And I do want to be clear that we were never included in the original 1965 rule, but that was never intended to be an exhaustive list. And we've historically always been treated in the professional category, and therefore eligible for the higher loan limits. So that's the conundrum here, is that we have students interested in entering this profession, but now they're going to be offered significantly lower loan amounts than what they might need to complete their education, and they won't have access to the Grad PLUS loans.
Jon Fansmith: And I know a lot of our-
Sarah Spreitzer: So Valerie... Oh.
Jon Fansmith: Oh, sorry, Sarah. Can I just add one thing for context?
Sarah Spreitzer: Yeah.
Jon Fansmith: The difference in the loan limits, for people who aren't aware, are substantial. If you are considered a graduate program, which is any program that's not one of the 11 the Department of Education decided through the rulemaking process, as a student, you can borrow $20,000 a year up to a maximum of $100,000 across your program of study. If you are a professional program, you can borrow $50,000 a year up to $200,000 across your academic career.
And there is a reason Congress and the Senate wrote that language because they recognize there are a lot of fields that are very expensive to educate for lots of very good reasons, and Valerie can elaborate on those. But that you would need students to borrow more to access those fields because of the nature of what they are and who they provide and the importance of those fields to our country. So the Senate and generally Congress's intent was really clear. I think the department went in a very different direction than a lot of people expected.
Valerie Fuller: Agreed.
Sarah Spreitzer: Yeah, that was actually going to be my question for Valerie and you, Jon, is that, I mean, I didn't follow the One Big Beautiful Bill as closely as you, but my understanding was this was to save money and to also try and limit student debt. But we were told in the negotiations, for those professional programs like nursing, like social work, other professions that we have high needs for in this country, they would be covered under this kind of professional category. So where did that go wrong between the Congressional intent and what the negotiated rulemaking panel did?
Valerie Fuller: So that is a little unclear to me. I will be honest. I don't know if they were simply looking at numbers, but we don't know how they came up with that. I will say the programs that were excluded were nursing, PT, OT, audiology, social workers, audiology, education, and architecture, and I think I have them all. Really essential pieces of our healthcare workforce. And this will have devastating consequences. But to answer your question, I don't know exactly where that went awry.
Jon Fansmith: Yeah, it's an interesting, and I think one of the things we still don't really know, is the department came in and announced that only these 10 fields would be considered at the start of the process. This was not something that arose as part of discussions. And they cited, as Valerie talked about, the original regulation that was in the books, the original definition. But that definition had not only never precluded nursing, it had been used by institutions. They defined which programs were considered professional or graduate on their campuses before any of this meant anything, before there were any relevant changes in how those programs would be treated. So it was a decision made by campuses based on what they actually believed.
And the other part of this definition, which the Senate cited in whole, was those 10 programs the department identified, they were meant in the language as examples. The bill language said there's a three-part test for whether it's a professional program. And it is, does it require a substantive academic course load? Does it lead to a recognized profession? And does that profession generally require licensure? By all three tests, nursing very much passes the test, and that's why nursing programs had been treated as professional programs, and a lot of these other programs as well. And so the department not only came out of left field with this very narrow interpretation, but in many ways, it goes directly contrary to what Congress actually intended and laid out in the language.
Sarah Spreitzer: And then I know the Big Beautiful Bill is supposed to take effect as soon as possible. So I believe it would be sometime this summer. Is this being applied to new students that may be entering nursing, they're going to see these restrictions, or is it current students in those fields that are going to suddenly see their loans restricted?
Valerie Fuller: So it will be future students. And I want to back up and just say that this is a proposed rule. It has not passed yet. The department has not yet given us notice of proposed rulemaking so that we can submit public comment. But it is, at this point, not in rule. But if it were to go into effect, it would be July 1 of 2026. And students that are already in the pipeline would not be affected is what they've said.
Jon Fansmith: The statute says if you are getting Grad PLUS now, you're a current student, you can continue to receive it for three more years so long as your program would end before within three years. So current students, likely to be less impacted, especially in a lot of the fields we're talking, social work, nursing, education. But certainly there's some students who in other fields who might, especially at the doctoral level, might still see a limitation even if they're a current student.
Mushtaq Gunja: Can I ask a couple of technical questions that are in the chat? First, the 100,000, $200,000 limits, is this just for graduate loans, or does this include undergraduate programs as well?
Valerie Fuller: That's a great question. So it only affects graduate education. But I will say that this will definitely, in nursing anyway, have a direct effect on undergrads. Because in all states, in order to teach nursing, you have to have a minimum of a master's. And for all advanced practice nurses, which includes nurse practitioners, nurse anesthetists, clinical nurse specialists, and nurse midwives, it's a minimum of a master's and more and more programs are moving to the doctorate level. That was something that came out of the Institute of Medicine, which is now the National Academy of Medicine years ago, moving all healthcare professionals to the doctorate level. And so nursing has been on that path.
And the concern now is that if we kink this pipeline, not only are we going to affect advanced practice nurses like nurse practitioners, and patients, most importantly, but we're also going to affect undergrads because if we don't have enough nursing faculty to teach undergrads, we won't have bachelor's prepared RNs at the bedside.
Mushtaq Gunja: Do the loans here follow the student versus follow the program? So I start, whatever, I start in law school, I do a semester. I find it's not for me. Though I mean, I don't know who law school wouldn't be for, but whatever. And then I go and start a nursing program. What loan limits apply to me as somebody who has done two different types of programs?
Valerie Fuller: So if you're in the professional category, your cap would be 200,000, and that's lifetime if you decide to go back. And so a common thing we see in nursing is that people will get a master's in nursing. Maybe they want to teach or do something else. And then maybe they want to go back and become a nurse practitioner. And so their cap, because they're potentially going to be considered graduate, will only be 100,000, which I feel like could be used up very quickly.
Jon Fansmith: Yeah. To your point, Mushtaq, you carry your cap across programs. You can get a higher cap if you're in a professional program, but it would include what you've already accrued at other programs as well. So there's a hard cap. No one can borrow more than $257,000 because you're capped for undergraduate borrowing-
Valerie Fuller: Oh, right-
Jon Fansmith: ... at 57,000.
Valerie Fuller: ... in the undergrad.
Mushtaq Gunja: Valerie, you mentioned that this is not a fully done deal, thankfully.
Valerie Fuller: Thankfully.
Mushtaq Gunja: We still have some time. Yeah, thankfully. Jon, Valerie, I mean, what is happening at the Congressional level? I mean, we just spent a little time talking about appropriations. This is not exactly in appropriations. Of course, this is a different part of the world. But what can be done? I mean, certainly I know that Congress has been hearing from all of us, from the nurses themselves, from future students, from our institutions. Where are we vis-a-vis Congress? What should we be doing? Jon first, then Valerie.
Jon Fansmith: So I think you've kind of hit the nail on the head here too, and I want to give Valerie and her fellow nurses a lot of credit for elevating this issue in a way that maybe us higher education folks wouldn't be able to without that. And certainly the public view of nurses, and how highly they're valued in our communities, has certainly helped raise the significance of what this action by the Department of Education means.
There's three bills, at least I'm aware of, that have been introduced in Congress that would in different ways address this issue. We at AC have already endorsed a bill that's called the Professional Student Degree Act, which would move about 15 more programs, fields into the professional category, including nursing, including social work, including education, architecture. And that's sponsored by Representative Mike Lawler of New York, Republican. It has at least four Republican co-sponsors at this point. So one that, I think, especially given how narrow the margins are in the House right now, is probably has the best path moving forward.
But there's also two bills that are introduced by Democrats, Timothy Kennedy, a Democrat from New York, has the Loan Equity for Advanced Professionals Act, which would essentially get rid of the lower threshold limit and essentially say all graduate students have access to the $50,000, $200,000 threshold for borrowing. And then Representative Josh Harder, who is a Democrat from California, has a bill that would essentially push out the deadline for the elimination of Grad PKUS and the loan limits going into effect a number of years. So it buys some more time before the impact of this happens. And it hopefully buy some more time, if that were the bill to advance, to come up with a much better alternative than the one we're likely to face.
Valerie Fuller: I'll point out two things that came out in the news over the last two days. So the Gallup poll released their list of the most honest and ethical healthcare professionals, and nursing was at the top again for the 24th year in a row. And then yesterday, I think it was, no, two days ago, the US News and World Report released that the number one healthcare job in America is nurse practitioners. And so there are people that are interested in going into these programs. And to restrict them now, again, is going to reduce the number of NPs that are able to enter practice, but we're also going to see patients lose access if we can't replace them quickly enough.
Jon Fansmith: And I think one of the things about the limits, and welcome your thoughts, Value. I mean, part of it is it will disproportionately fall on low-income students who want to access these professions. It is one thing, if you have other sources of support, you can qualify for a private student loan to supplement what a federal loan looks like. What we know for low-income students is generally they won't have the credit scores or a co-signer who can secure that loan. They won't have available resources they can dedicate to meeting the gap between what they would have paid and what they can now borrow. So it's not just that. We're making it harder for people to enter a field we desperately need more people in. But we're also, within that field, limiting the opportunities for as broad a range of people to see that as a viable pathway.
Valerie Fuller: Absolutely.
Mushtaq Gunja: It's funny, because in this Carnegie work, we put together the student access and earnings classification, really looking at how well students are doing with earnings after attendance. And our nursing schools are doing phenomenally well. Just connecting this conversation to the AHEAD conversation, the AHEAD committee conversation around institutions and programs that are failing, I mean, this is not our nursing schools. This is a very strange conversation to be having, especially vis-a-vis nursing, because what are we doing here exactly? It's not like our nurses, by and large, are having a hard time paying back the loans that they're taking out. I mean, they're making nice amounts. I mean, you're not getting rich, but it's a very comfortable... And because of the nursing shortage, I mean, the unemployment rates are very low for our nurses. So I mean, I hope that these bills have some chance of passing because I just think there isn't another side here that I see at least vis-a-vis the nurses. Sarah, I'm sorry, I interrupted. Go.
Sarah Spreitzer: Yeah. No, I was just going to put in a plug. Our producer, Laurie, put in our talking points if people are engaged and want to reach out to their Congressional member. It's very broad. It talks about this problem. And it doesn't endorse, I think, one bill over another, but says the Congress needs to take action because it's going to impact professions such as nursing.
Valerie Fuller: Absolutely. And I'll throw out a few more. If you are a nurse or a nurse practitioner or advanced practice nurse, there are several petitions from our national organizations that are urging the DOE to revise their definitions. But we also are asking people to submit public comment once the DOE does open their formal comment window. Again, please call, write, email, send smoke signals to your representatives, and let them know that graduate funding is really, it's a healthcare access issue. And in addition to that, I think we're going to need to have increased support at even a state level. Because if this goes through, we're going to need more grant programs, more loan forgiveness, more paid clinical training. I mean, there's a lot of things that will be affected if this does take effect this July.
Jon Fansmith: Yeah. And one of the things I noticed, I think it was Connecticut this week announced they're trying to stand up a supplemental graduate loan program in large part because they can see their nursing workforce disappear if that funding gap isn't addressed. And it's great. That's great that Connecticut is able to do that and can do that. That's not the case for every state in this country, and certainly not at the level that would be necessary. This really is the sort of thing we need the federal government to be stepping up and doing the right thing on.
Valerie Fuller: Absolutely.
Mushtaq Gunja: What other, Jon, Sarah, what other... This is excellent that there's some energy around nurses, and Valerie, I really, really hope that we're able to turn this around. What's being done for the other professions like nursing, especially in healthcare, that have also been affected by these loan limits? And what do you suggest that folks do?
Jon Fansmith: Yeah, I mean-
Valerie Fuller: Similar campaigns. Yeah. Sorry, Jon, go ahead.
Jon Fansmith: No, no, no, no. And we've started to see that, I think all credit to the nurses, I think they were front and center and out of the gates quickly. But we've seen this in other fields, educators, social workers, I think there's a growing awareness. And certainly to our audience, a lot of, I've even seen it in the chat, people are saying, "I work in nursing education. I work in architecture." Talk to your peers.
I'm not surprised that people aren't closely following the federal negotiated rulemaking process the way that we are. It's with everything else in your life, this may not be where you're putting your time, but it has real impacts, and it's a pretty clear argument to make, what's at stake and what's being done. And so to the extent you're in a professional society and you haven't heard them, seen them reach out to you about it, raise it with your leadership, to the extent you're talking with the people on your campus or in your community about what's on the horizon. I think when people hear about this, they get it pretty quickly what's at stake, and they don't agree with where the Department of Ed's headed.
Sarah Spreitzer: And I would just add, it's not going to be an easy fix. We're seeing several bills being introduced. I think it's likely not going to be any specific bill. It'll be some sort of combination to get bipartisan support. I've been asked questions a lot about how are these bills being scored? Where do the costs come from? Because it was part of that reconciliation bill. So it's going to be something that we're going to be talking about probably for the rest of this year. This is not going to be the last time we talk about the grad and professional loan limits. It's going to take up, I think, a lot of time this year. That's my prediction at least.
Mushtaq Gunja: Quick question for you guys. There's a couple of references here to CIP codes and eligibility of loans based, not just on the broad sort of maybe two-digit CIP, but maybe also the six-digit CIP. SIP, I think stands for classification of instructional programs. I should really know that. This is the definition of which degrees go into which broad categories. It's a classification system. Jon, Valerie, what are the impact of the CIP codes on eligibility here? Is it at a six-digit level instead of the two-digit level?
Valerie Fuller: Jon, I'll let you take that.
Jon Fansmith: Sure. So they restricted essentially the eligible programs to four areas at the two-digit level, the broad category. And for people who don't follow CIP codes, and this is, as Mushtaq sort of referenced, the federal government's attempt to align an academic program with other similar types of programs, but also especially the professions that that program prepares you for. So you might have a health field, and under health, you'll have dentistry and nursing and medicine and all these other things, and then subcategories within those. And I see somebody saying about related to the AHEAD earnings test, which is a separate discussion.
But part of what they essentially did pretty prescriptively with the language they reached in consensus was to narrow what would be, not just eligible programs, but the eligible degrees within some of those areas. So it's a very tightly written definition, but fundamentally it doesn't change the issue that we're talking about. There's nothing that, because it's written that way, should restrict it to that. It's just simply how it was drafted.
Valerie Fuller: And I will say, I'm worried about being categorized as something because I worry about downstream effects. If nursing's not considered professional, where else does that show up within our federal government in terms of funding or something else? So I'm concerned, not only for patients in terms of lack of access to care and longer wait times and lack of access to behavioral health and similar services, but also once you put a label on something, it's hard to get it back off, especially at the federal level. So that's another concern that I have is for all of these professions is what happens if we get labeled this way and it has other effects.
Sarah Spreitzer: So I think for our last question, I'm going to ask Jon and Valerie a question from our friend, Jared Cummings, who said that the graduate student aid conversation seems to be driven by the misguided assumption that colleges and universities are charging tuition for such programs well over their actual costs of instruction. Are we seeing any receptivity to a more reality-based view of graduate student education costs and therefore graduate education tuition? I don't know if you can answer that in our last five minutes, but I thought it was an interesting question because much of this discussion is driven by cost, return on investments, student debt. So I would put that question to both of you.
Valerie Fuller: I can start. I think it's very unclear whether this will reduce tuition. Universities don't set tuition based on federal loan amounts. So healthcare programs are very expensive to deliver. And possibly it could even, if we drive students out and these classes are smaller, you still have to pay for the simulation labs and for the faculty and for the clinical placements, and it potentially could make tuition even higher.
Jon Fansmith: And I will say it seems to be a fundamental misunderstanding of what actually happens on a college campus. And to Valerie's point, we talked about this, these programs are expensive for a reason. You do not want a nurse who doesn't know how to diagnose the symptoms she's presented or he's presented with, who doesn't know how to administer medication or do... I won't even pretend to know all the different things you need to know to be a nurse. That's why it's expensive to educate nurses. That's why it's expensive to retain the kind of faculty who have the experience to impart those skills in the way students can learn.
Don't want to go too much into this, but Florida recently had a series of incidents around shady schools certifying students for nursing education that has led to patient deaths. This is why these programs are expensive. This is why they take time to avoid things like that. I think, when we have conversations with policymakers, they seem to understand that, but there is this pervasive sort of myth that somehow if you just limit what schools get, they'll just make it cheaper. And in some cases, cheaper is definitely not better. It won't work and the consequences are going to be pretty significant.
Mushtaq Gunja: Well, I think that's a good place to end. Valerie, Jon, Sarah, any last sort of piece of advice for folks that are worried about nurses in particular, healthcare more broadly, or any of the fields, honestly, that have not been categorized as professional as we move forward?
Valerie Fuller: I'll start. This will have a significant impact on nursing. And so when that comment period does open, please, please, please submit comments to the Department of Education. If you want to go to our advocacy center, it's www.aanp.org, and you can click on the advocacy tab. In addition, follow our social media feeds. As soon as we hear when that comment period's open, we're going to send out a blast and encourage everyone to write.
Jon Fansmith: I'll just echo what Valerie said. We're going to put up a tool, maybe as soon as today, that will allow AC members and anyone in the public to reach out to their specific senators and representatives directly. You can craft the message yourself. There's suggested text there. And certainly when we see the proposed final rule, we are going to need as many comments coming in about how the department has chosen to proceed. So keep tune to us, keep tuned to Valerie, we got to get the word out.
Mushtaq Gunja: Thank you, everybody. We will be back again in a couple of weeks. I think we're meeting next January 27th. We have Kim Jones, the president of COE, to talk a little bit about TRIO and the very important work that is happening there and what we can do to try to preserve those important grants. Valerie, thank you so much for joining. Jon, Sarah-
Valerie Fuller: Thanks for having me.
Mushtaq Gunja: ... it was lovely to see you as always. And we will see everybody very soon. Thanks all.
Sarah Spreitzer: Bye.
Valerie Fuller: Thank you.
Sarah Spreitzer: Thank you.
Jon Fansmith: Thanks. Thank you for joining us on dotEDU. If you enjoyed the show, please consider subscribing, rating, and leaving a review on your favorite podcast platform. Your feedback is important to us and it helps other policy wonks discover our show. Don't forget to follow ACE on social media to stay updated on upcoming episodes and other higher education content. You can find us on X, LinkedIn, and Instagram. And of course, if you have any questions, comments, or suggestions for future episodes, please feel free to reach out to us at podcast@, A-C-E-N-E-T, .edu. We love hearing from our listeners. And who knows, your input might inspire a future episode.
