EdCircuit Staff 
Since July 1, 2026, how much a graduate student can borrow in federal loans depends on one question: is the program a “professional degree”? The 2025 federal budget law ended Grad PLUS loans for new borrowers and set new caps that are far higher for professional students than for other graduate students. The Department of Education’s definition of a professional degree, which left out nursing, teaching, social work and public health, has been challenged in three federal lawsuits and partly blocked by a judge. This guide explains the new limits, which programs count today and what is still undecided.
The new graduate loan limits
The changes come from Public Law 119-21, the 2025 budget reconciliation law, and the Department of Education’s final rule published May 1, 2026, which took effect July 1, 2026. The rule ends new Grad PLUS loans and sets these limits on federal Direct Unsubsidized loans:
| Graduate student | Professional student | |
|---|---|---|
| Annual limit | $20,500 | $50,000 |
| Aggregate limit | $100,000 | $200,000 (minus any amount borrowed as a graduate student) |
| Lifetime limit, all federal student loans | $257,500 (excluding loans taken as a parent) | |
Parent PLUS loans are now limited to $20,000 a year per dependent student and $65,000 in total. With Grad PLUS gone, the caps matter most for the most expensive programs.
Who is grandfathered?
Students who were enrolled in a program on June 30, 2026, and received a federal Direct Loan for that program before July 1, 2026, can keep borrowing under the old rules for the expected time it takes to finish that credential, according to the final rule.
What counts as a professional degree?
The final rule defines a professional degree as one that prepares a student to begin practice in a profession, is generally at the doctoral level with at least six years of college coursework, and generally requires a professional license. It lists 11 fields: pharmacy, dentistry, veterinary medicine, chiropractic, law, medicine, optometry, osteopathic medicine, podiatry, theology and clinical psychology.
That list drew the most controversy for what it left out. When the draft list became public in November 2025, the Associated Press reported that it excluded nursing, physical therapy, occupational therapy, social work, education and accounting, among others; the department said 95 percent of nursing students are in graduate programs that would not be affected. The American Association of Colleges of Nursing called the final rule “arbitrary and capricious” and said it would diminish the nation’s healthcare workforce.
The lawsuits and the court order
Three lawsuits challenge the definition:
- a group of six associations, including the American Association of Colleges of Nursing, the American Association of Nurse Practitioners, the National Education Association and the Association of Schools and Programs of Public Health, in federal court in Washington, D.C.;
- 25 states and the District of Columbia, in federal court in Maryland;
- ten national nursing organizations led by the American Nurses Association, in federal court in Massachusetts.
On June 24, 2026, Judge Beryl Howell in Washington temporarily blocked part of the definition, finding it likely conflicts with the definition Congress referred to when it set the loan caps. She ordered the department to follow the existing federal regulation that Congress cited, but she declined to block the new loan caps themselves. In Massachusetts, the judge denied the nursing groups’ request for a preliminary injunction in August; both cases continue.
Which programs count as professional now?
Following the court order, Federal Student Aid published an interim list of programs on June 29, 2026, updated July 10. While the court order stands, these programs are treated as professional degrees:
- medicine, osteopathic medicine, dentistry, pharmacy, optometry, podiatry, veterinary medicine and chiropractic;
- law;
- clinical psychology (Ph.D. and Psy.D.) and several other Psy.D. psychology programs, including school and counseling psychology;
- physician assistant, anesthesiologist assistant, athletic training, audiology, speech-language pathology, occupational therapy and physical therapy;
- nursing: the registered nursing master’s (MSN), nurse anesthesia (DNAP) and the doctor of nursing practice (DNP);
- divinity (M.Div.) and rabbinical studies.
Still not on the list: graduate programs in education and teaching, social work, public health, dental hygiene, architecture and accounting. The department said the list “may change as litigation in the case proceeds.”
What it means for teachers and future teachers
Education degrees remain on the graduate side of the line. In its final rule the department wrote that “no State requires an M.Ed. or similar master’s degree to begin work as a teacher,” so education programs are capped at $20,500 a year and $100,000 in total. Students in longer or more expensive education programs, such as some doctoral programs, may reach that limit and need other ways to pay. The National Education Association is one of the plaintiffs challenging the definition.
What students and schools should do now
- Check your program’s classification with your college’s financial aid office, using the interim list.
- Confirm whether you are grandfathered. If you were enrolled and borrowed before July 1, 2026, ask how long the old limits apply to you.
- Plan for the gap. If the new caps are below your cost of attendance, compare institutional aid, employer tuition benefits, state programs and, as a last resort, private loans.
- Watch the courts. Briefing in the Massachusetts case runs through mid-November, and a ruling in any of the three cases could change which programs qualify.
Frequently asked questions
What is a professional degree for federal student loans? A degree that prepares students to begin practice in a profession, generally at the doctoral level and generally requiring a license. While a court order is in effect, Federal Student Aid uses an interim list that includes medicine, law, pharmacy, dentistry, physical therapy, physician assistant and several nursing degrees.
How much can graduate students borrow now? $20,500 a year and $100,000 in total for graduate students; $50,000 a year and $200,000 in total for professional students, with a $257,500 lifetime limit.
Is nursing a professional degree? Under the department’s final rule, no. Under the interim list issued after the June 2026 court order, the MSN, DNP and nurse anesthesia programs are treated as professional while the case continues.
Is a master’s in education a professional degree? No. Education programs are treated as graduate programs and are capped at $100,000 in total.
Is Grad PLUS gone? For new borrowers, yes. Students who were already enrolled and borrowing before July 1, 2026, may keep their previous access for the expected length of their program.
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