DOE Scales Back Lower Student Loan Limits for Several Degrees

The Department of Education, in response to a preliminary injunction that stayed its definition of graduate students eligible for student loans, issued on Monday a revised rule adding some fields to the list of those eligible for higher borrowing limits and removing some others.

The DOE’s temporary rule allows students pursuing degrees in nursing, physical therapy, speech pathology and several other fields to pursue the higher loan limits while the case is pending. The DOE also removed theology studies from the list, though the master of divinity degree remains on the “professional” list.

In its announcement of the updated rule, the DOE stated it is “confident” that the professional degree classification is lawful and pledged to continue fighting it in court.

U.S. District Judge Beryl Howell, of the U.S. District Court for the District of Columbia, granted a preliminary injunction on June 24 blocking the DOE from changing the definition of a professional degree, subject to her review and the outcome of the case.

The DOE had narrowed the eligibility for certain higher student loan borrowing limits to include only certain degrees in 11 fields: chiropractic, clinical psychology, dentistry, law, medicine, optometry, osteopathic medicine, pharmacy, podiatry, theology and veterinary medicine.

All graduate students currently can borrow up to the full cost of attendance in their program, less any other financial assistance, using a Grad PLUS loan. When Grad PLUS is eliminated on July 1, under a provision of 2025’s One Big Beautiful Bill Act, regulations would cap annual loans for all graduate studies at $20,500 per year ($100,000 total) and at $50,000 per year ($200,000 total) for the professional programs designated in the 11 identified fields.

The preliminary injunction was granted based on the request of eight groups, representing nurse practitioners, physician assistants, speech language pathologists and others, who claim that students in fields not on the OBBBA’s list would be forced to either forgo their education or accept private loans with less favorable terms.

Howell wrote in her ruling that when Congress enacted OBBBA last year, it expressly adopted a long-standing regulatory definition for degrees that the DOE had been using since 2007.

“By adopting the preexisting definition as it was in effect on a specific date, Congress removed any discretionary authority the Department may have had to narrow the definition for the purpose of determining federal loan caps,” Howell wrote. She added that because the rule ran afoul of the Administrative Procedure Act, it had to be set aside before it could take effect.

A separate lawsuit filed in the U.S. District Court for the District of Maryland by 25 states and Washington, D.C., challenges the DOE’s rule capping access to federal student loans for borrowers earning a graduate degree in healthcare-related jobs, remains pending. It alleges the rule may compel students to postpone finishing their education, may force them to rely on private loans or may exacerbate staffing shortages in health professions.