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Federal student loans, especially for graduate students, will undergo major changes in 2026, potentially restricting access to high demand medical fields, and limiting the number of workers in professions like physical therapy and nurse practitioner, at a time when there are expected shortages in those job fields. The One Big Beautiful Bill Act, passed earlier this year by Republican lawmakers along partisan lines, eliminated the Graduate Plus loan program, and instituted caps on the total amounts that students in many graduate programs can borrow. But a key piece of the law created a higher limit for programs that are considered professional programs, for example medical and law school. But Congress left defining what counts as a professional program up to the United States Department of Education, making loan limits highly contested issue during what is known as Negotiated Rulemaking. Why Will Some Programs Have Higher Student Loan Limits Than Others? When Congress passes a law, most federal agencies, including the Department of Education, must figure out how to implement the changes in the law. But, for the Department, it must take an extra step and bring together a panel of experts on the issue to negotiate over what the regulations will look like. That is Negotiated rulemaking, or NegReg for short. That process wrapped up last week, and because the committee came to agreement on the new regulations, the Department of Education must write the final regulations to match what negotiators agreed to at the table. When negotiators fail to reach consensus on proposed rules, the Department is allowed to write the rules however it sees fit. How Will Student Loans Change For Graduate Students? Starting in July 2026, loans for most graduate programs will be capped at $100,000 in total borrowing in federal Direct Student Loans, and the Graduate PLUS Loan Program will no longer exist. MORE FOR YOU Most graduate programs are going to be subject to the lower borrowing limits. The only programs that will allow students to borrow at the higher $200,000 cap will be: Medicine (M.D.) Law (L.L.B. or J.D.) Dentistry (D.D.S. or D.M.D.) Veterinary medicine (D.V.M.) Pharmacy (Pharm.D.) Optometry (O.D.) Osteopathic medicine (D.O.) Podiatry (D.P.M., D.P. or Pod.D.) Chiropractic (D.C. or D.C.M.) Theology (M.Div. or M.H.L.) Clinical psychology (Psy.D. or Ph.D.) Degrees that have the same CIP code (a set of codes the Department of Education uses to group similar programs of study) as the ones listed above, are Doctoral level, and require licensure to practice, will also count as professional programs under the new definition. But it is unlikely that those requirements will add many additional programs in reality. At the start of negotiations, the Department of Education proposed an almost identical list, only adding Clinical Psychology because of the negotiations. The resistance from the Department to to a wider list flew in the face of multiple experts at the table raising concerns that such a restrictive list would limit access to a wide range of programs that are professional in nature. The list leaves out many programs in the medical field, including physical therapy, nurse practitioner, and physician assistants. These are fields in high demand, with predicted growth of 35% for nurse practitioners in the next decade, and an expected shortfall of more than 12,000, or over 5% in the number of physical therapists needed over a similar time period. Department of Education officials put a great deal of pressure on the negotiators to agree to its very limited list, with Nicholas Kent, the Under Secretary for Higher Education, telling negotiators that the Department had made concessions that it could reverse if there was no consensus on the proposed rules. How Will Students Pay For Programs That Exceed The New Student Loan Caps? Students unable to borrow enough to pay for graduate programs in expensive fields not included in the new definition of professional degree will be forced to borrow private student loans or not enroll in those programs at all. Approximately 370,000 students are expected to be impacted by the changes, according to research from the Postsecondary Education and Economics Research Center. Some of those students may be able to turn to the private loan market to pay for their graduate education, but others will not. Federal student loans exist in part because private lenders are often unwilling to lend to students with limited credit histories, and no current earnings available to gauge ability to repay. Private lenders also tend to require co-signers, which can be impossible for first generation and low-income students, who do not have family members able to co-sign loans for them. If the new student loan limits make graduate school, especially in high demand medical fields, inaccessible for lower income students, it could cause long-term harm to the prospects of ambitious students, and the American economy.
