Definition of Professional Degree Affecting Graduate and Professional Degree Loan Limits

Description 

Federal law and the U.S. Department of Education’s regulation take different approaches to defining which programs qualify for the higher professional student loan limits. The statute created a three-part definition of a professional program and included examples of professional degrees. The Department's regulation went further by adding additional conditions and treating those statutory examples as the complete list of qualifying programs, except for the addition of Clinical Psychology.

• What the statute says: A professional program must meet three statutory conditions. The statute also provides examples of professional degree programs.
• What ED’s regulation does: The Department treated the statutory examples as an exhaustive list of qualifying professional programs, added Clinical Psychology, and added conditions for any additional programs to qualify. Under the Department's approach, an added program must require a doctoral degree, share a four-digit CIP code with a program already on the Department's list, and require licensure. The preamble also indicates that programs preparing graduates to practice under the supervision of another licensed professional generally would not qualify.
• Why the distinction matters: Programs that appear to meet the statute’s three-part definition may still be excluded from the higher loan limits if they are not on the Department's regulatory list.
• Loan limits differ by program type: Students in designated professional programs may borrow up to $50,000 per year, with a maximum aggregate limit of $200,000. Other graduate students are limited to $20,500 per year, with a maximum aggregate limit of $100,000.

The Department's final regulations identify 11 professional program areas for purposes of the higher loan limits: medicine, osteopathic medicine, podiatry, chiropractic, optometry, pharmacy, dentistry, veterinary medicine, law, theology, and clinical psychology. The key issue is that the Department did not treat the statutory examples as illustrative. Instead, the Department treated them as the full set of qualifying professional programs, apart from adding Clinical Psychology.

Current Status:

U.S. District Court for the District of Columbia, on June 24, 2026, ordered a temporary block to the provision of new regulations defining professional degrees for purposes of loan limits. The loan limit elements are not affected.

The Department, on June 29, 2026, issued (GENERAL-26-42) Update to List of Professional Degree Programs Due to Court Order to identify additional professional programs meeting the statutory elements of the definition of a professional program for purposes of the loan limits.

Action to be taken

• Review potentially affected programs against the statutory definition and the Department's current interim guidance on qualifying professional degree programs, recognizing that the guidance may change as litigation continues.
• Assess the impact on students by identifying programs whose classification could affect Direct Loan borrowing limits and evaluating which current or prospective students may be affected.
• Document the basis for program classifications, including degree level, CIP code, licensure requirements, and other characteristics supporting the institution's determination.
• Coordinate across campus among Financial Aid, the Registrar, Academic Affairs, Compliance, Legal Counsel, and Communications to ensure a consistent institutional approach.
• Communicate carefully with students, explaining the current loan limits and eligibility requirements without suggesting that program classifications are final while litigation remains pending.
• Monitor litigation and Department guidance and be prepared to adjust program classifications, institutional procedures, and student communications as new court decisions or federal guidance are issued.
• Maintain records of institutional analyses, classification decisions, and communications to demonstrate the basis for decisions made under the Department's current guidance.

Effective Date

July 1, 2026 for the loan limits, but temporary stay on regulatory definition of professional program.

Resources

• Negotiated Rulemaking for Higher Education 2025  (RISE Committee)
• Consensus Language for 34 CFR 685.101 Definitions and Graduate Student and Professional Student
• New OB3 Federal Statute:  SEC. 81001. ESTABLISHMENT OF LOAN LIMITS FOR GRADUATE AND PROFESSIONAL STUDENTS AND PARENT BORROWERS; TERMINATION OF GRADUATE AND PROFESSIONAL PLUS LOANS.
• 34 CFR 668.2 General Definitions:  Professional degree
• U.S. Department of Education Press Release - U.S. Department of Education Concludes Negotiated Rulemaking Session to Implement the One Big Beautiful Bill Act's Loan Provisions
• From RISE to AHEAD: What We Learned and What Comes Next in Federal Rulemaking; WCET Frontiers, 12/4/2025
• Press Release from the Department:  U.S. Department of Education Issues Proposed Rule to Make Higher Education More Affordable and Simplify Student Loan Repayment (1/29/26)
• Notice of Proposed Rulemaking (NPRM)- Reimagining and Improving Student Education (Published 1/30/2026)
• The Department of Education’s Proposed Rule to Define “Professional Student”: Frequently Asked Questions; CRS Product (Library of Congress) (2/24/26)
• Final Regulations: Reimagining and Improving Student Education: Federal Student Loan Program (Published 5/1/2026)
• Members of Congress introduced a Bicameral Joint Resolution under the Congressional Review Act (CRA) to rescind the final rule (5/7/2026).
• Judicial Challenges to the Rules:
  • State of Maryland, et al. v. U.S. Dep’t of Education, 26 states challenging the regulations
  • American Association of Nurse Practitioners v. McMahon, lead case with PA Education Association and American Academy of Physician Associates v. United States Department of Education.