Keep Factually independent
Whether you agree or disagree with our analysis, these conversations matter for democracy. We don't take money from political groups - even a $5 donation helps us keep it that way.
How will the 2025 reclassification of non-professional degrees affect federal student aid eligibility?
Executive summary
The Department of Education’s negotiated rulemaking and related implementation of the OBBBA/RISE changes will narrow which graduate programs count as “professional degrees,” sharply lowering annual and aggregate federal Direct Loan limits for many graduate students — from proposed professional limits of $50,000 annual / $200,000 aggregate to graduate limits of $20,500 annual / $100,000 aggregate starting July 1, 2026 [1]. Several professional organizations warn that hundreds of thousands of students and billions in loan access could be affected if fields such as nursing, social work, public health, education, and allied health are excluded [2] [3].
1. What “reclassification” actually changes for borrowing
Under the negotiated rule text implementing OBBBA’s loan caps, a narrower “professional degree” definition determines who gets higher loan ceilings: students in programs the Department labels professional can borrow up to $50,000 a year and $200,000 total, while other graduate students face $20,500 a year and $100,000 aggregate beginning July 1, 2026 [1]. The Department’s process uses CIP codes and an enumerated list of fields; programs that do not share a 4‑digit CIP code with the eleven fields ED designates will not qualify as “professional” even if industry observers view them as practice‑oriented [4].
2. Who the Department’s draft appears to exclude — and why stakeholders object
Advocacy and discipline groups report that the Department’s framework would exclude many health, education, and social‑service degrees commonly viewed as professional — examples cited in reporting and posts include nursing (MSN, DNP, NP, CRNA), social work (MSW), public health (MPH, DrPH), physician assistant, OT/PT, counseling, and some business and engineering master’s degrees [5] [6] [7]. Professional associations warn that removing those fields from the professional label will limit access to higher loan limits and Grad PLUS replacement pathways and could “make it more difficult” for students to pursue critical service professions; CSWE estimates about 370,000 students could be affected and more than $8 billion in federal loans may no longer be available annually under the new definition [2].
3. Immediate financial effects for students
Practically, students enrolled in reclassified programs will face lower annual borrowing ceilings and may lose access to previously relied‑on options like Grad PLUS (the rulemaking phases out Grad PLUS for many graduate/professional borrowers), increasing the likelihood they must rely more on private loans, institutional aid, or out‑of‑pocket payment for program costs that exceed federal limits [1] [8]. The AAU warns that a $200,000 cap limited to a small set of programs could prevent federal loans from covering the full cost of expensive professional degrees such as medicine (AAU cites medical degree costs) and thereby reduce access [3].
4. Department’s method: CIP codes, enumerated fields, and legal mechanics
The Department’s approach anchors “professional degree” status to a regulatory definition in CFR 668.2 as of July 4, 2025, and to specific CIP code linkages; programs lacking the required shared 4‑digit CIP with the eleven designated fields would be excluded even if they meet other substantive criteria for practice preparation [1] [4]. This technical, code‑based method explains why some programs that stakeholders consider “professional” nevertheless fall outside ED’s list [4].
5. Broader workforce and equity concerns cited by critics
Nursing groups (e.g., American Nurses Association) and social work educators say exclusion threatens pipelines into underserved and rural care, worsening existing shortages and pressuring students from lower‑income backgrounds who rely on federal loans [9] [2]. AAU, NASFAA, CSWE, and nursing statements frame the rule as a funding cut disguised as definitional clarity and highlight that borrowers in excluded fields often have lower default rates and higher societal returns — arguments used to urge ED to revise definitions or use CIP groupings for health professions [3] [4] [2].
6. What is uncertain or not covered in current reporting
Available sources do not mention specific appeals processes for individual programs to regain “professional” designation, nor do they provide a finalized, exhaustive list of the eleven fields ED will deem professional; reporting describes drafts, consensus language, and stakeholder reactions but notes that rules will be published in the Federal Register and are subject to public comment and potential litigation [3] [1]. The long‑term administrative decisions about replacement of Grad PLUS in full operational detail are also described in outline rather than complete program manuals in current pieces [1].
7. How students and institutions are reacting now
Higher‑education groups and professional associations are urging ED to revise the technical criteria (for example, use health‑related CIP codes) and to engage stakeholders; some warn of legal challenges and highlight implementation complexity for financial aid offices that must manage dual regimes for existing versus new borrowers [4] [1] [2]. News outlets and specialty sites for nurses and allied professionals are amplifying practical guidance: explore alternative aid, prepare for lower federal borrowing limits, and engage with institutional financial aid teams [7] [8].
Bottom line: the change is not about invalidating degrees, but about who qualifies for higher federal graduate/professional loan limits; that reclassification can materially reduce federal borrowing capacity for many students in fields that professional groups say are critical to public health, education, and social services [5] [2] [3].