Changes are coming to federal student loans for graduate students. Earlier this year the One Big Beautiful Bill outlined these changes; the most notable being the elimination of Grad PLUS loans. Beginning July 1, 2026, new graduate students will still be able to borrow Direct loans (with updated loan limits) but will no longer have the addition of the Grad PLUS loan to cover tuition cost overruns.
This is significant as there will now be a distinction with respect to loan limits for Direct loans to graduate students pursing a graduate degree and those seeking a professional graduate degree. This distinction will determine how much a graduate student can borrow.
Graduate degree students will still be able borrow $20,500 annually but they will soon be capped to $100,000 in total loans, down from the former limit of $138,500. Majors deemed Professional will be able to borrow more. The loan limits for professional students will be $50,000 annually with an aggregate limit of $200,000, up from the former limit of $138,500.
Graduate school for any major can be expensive and this distinction between the two is cause for much confusion and frustration. It’s important to know how much you can borrow before committing to graduate school and finding yourself in a financial situation that challenges your educational goals.
What Defines a Professional Degree
According to the government a Professional degree is one that requires additional education beyond a bachelors degree to achieve a necessary higher skill level AND where licensure is generally required to practice in that career choice. These include, but are not limited to: Pharmacy, Dentistry, Veterinary Medicine, Chiropractic, Law, Medicine, Optometry, Osteopathic Medicine, Podiatry, Theology and Clinical Psychology.
Outside of the limited list above is everything else. Most graduate school majors are currently not designated “professional” nor were they before. This could change, but for now this is the list.
Graduate Majors that Are Not Professional
Not listed and causing quite the stir are the health professions of nursing, physician assistant and audiologists among others perceived to be “professional” by the public at large. Add to this educators, architects and accounting, which along with the previous health professions listed above do require licensure to practice.
One missing profession that stands out is that of a Physician’s Assistant which does require a master’s degree or higher, but for many other professions a master’s degree is not a requirement to practice. Nurses, architects and CPA’s can all practice in their chosen careers with only a bachelor’s degree and passage of their respective license exams.
Of course, a graduate degree can lead to many forms of advancement in most careers, it appears that where it’s not a strict requirement (i.e. absolutely needed) it does not currently qualify for the higher loan limits of the professional degree designation for federal student loans.
Reducing Student Loan Debt
It’s no secret student loan debt has grown quite a bit, ranging between $1.6-$1.8 trillion. This has become a real problem that is harming many Americans in a variety of ways. From struggling to make ends meet on a monthly basis, to the delay of major life milestones such as home ownership or parenthood, student loan debt is having a profound effect on the American dream.
While these loan limits can seem restrictive and may limit the number of students pursuing graduate degrees, they could also cause schools to reduce tuition and other costs if enrollment levels drop.
Students looking to attend graduate school can take some actions to help reduce the costs and thus the reliance on federal student loans to cover the costs. These include scholarships, fellowships, grants or a good old-fashioned job. With growing opportunities in online options, it’s increasingly more feasible to work and attend school at the same time. It’s not as desirable as focusing all your efforts on your education, but your future self will thank you when your student debt is far less, or even non-existent, as you graduate with your master’s degree or higher.
