What the proposed redefinition of “professional degrees” might mean for institutions, sectors, and workforce pipelines

The federal student loan landscape is undergoing its most sweeping restructuring in decades. Under the One Big Beautiful Bill Act (OBBBA) of 2025 and the U.S. Department of Education’s (ED's) proposed regulations, the definition of “professional degree” is being reinterpreted, sharply reducing the number of students eligible for the higher federal loan caps reserved for professional training. The resulting changes are likely to force institutions to rethink how they plan for tuition and aid, alter enrollment patterns, and influence the flow of workers into occupations that, in many places of the country, are already often going unfilled.  

Under the old loan system, all graduate students had access to the Direct Unsubsidized loan program and could then borrow additional funds through the Direct Grad PLUS program up to the full cost of attendance. OBBBA eliminates Grad PLUS completely, instead placing all graduate-level borrowers into one of two categories.  

Most graduate degree borrowers will face low annual and lifetime borrowing caps. Students in programs that meet the new professional degree criteria will still qualify for much higher loan limits.  What qualifies as a professional degree is narrowing under the proposed changes, however.  

According to the ED issue papers and proposed regulatory text, a professional degree must: 1) prepare a student for beginning practice in a licensed profession, 2) require professional skill beyond that normally associated with a bachelor’s degree, 3) be generally a doctoral-level program requiring at least six years of postsecondary study, 4) fall within the same four-digit CIP code family as the listed fields. ED identifies only 11 fields that qualify:  

Critics of the changes point out that many medically related occupations do not meet the criteria as interpreted by ED. Students in those programs will be limited to the lower graduate loan tier. If schools can’t boost scholarships or other types of aid, they can expect fewer students in programs like nursing and more students shifting toward the few programs that qualify as “professional.”  

Fields such as advanced practice nursing, physician assistants, physical therapy, occupational therapy, and audiology are among the most affected. These programs often require expensive clinical hours and specialized placements, which makes additional financing alternatives particularly important. Without access to higher loan amounts, students may be discouraged from entering these fields, exacerbating existing workforce shortages. Of course, this could also have ramifications for the wider economy, based on Bureau of Labor statistics showing that the health care industry has accounted for more than half of all job growth in the last 12 months. 

The new definition is not yet final. The next stage of the federal rulemaking process requires that the full regulatory language and an invitation for public comment be published in the Federal Register. For institutions, agencies, and employers concerned about workforce shortages or program viability, this will be an important opportunity to comment on the proposed changes. The same groups are likely to petition Congress for changes in the legislation to add more degree fields, modify the criteria, and adjust borrowing limits. If the proposed language becomes final, opponents of the changes believe most graduate programs, including many in high-need workforce areas, will see their students restricted to lower loan caps, likely resulting, it is argued, in negative impacts on enrollment, institutional finances, and the flow of workers into key professions.