Education Department Proposal Could Reclassify Nursing and Other Degrees, Affecting Student Loan Eligibility

A controversial proposal from the U.S. Department of Education has sparked debate across the healthcare and education sectors as it seeks to narrow the definition of “professional degrees” for student loan purposes, potentially affecting thousands of graduate students.

The proposal, announced in November 2025 as part of the implementation of President Donald Trump’s One Big Beautiful Bill Act, would exclude numerous graduate programs from being classified as “professional degrees” when determining eligibility for federal student loans. Among the affected credentials would be education degrees (including teaching master’s), nursing (MSN, DNP), social work (MSW, DSW), public health (MPH, DrPH), physician assistant programs, occupational and physical therapy degrees, audiology, speech-language pathology, and most counseling degrees.

If finalized, the policy would have significant financial implications for students pursuing these degrees. Under the One Big Beautiful Bill Act, which goes into effect July 1, 2026, students in programs classified as “professional degrees” can borrow up to $50,000 annually with a lifetime cap of $200,000. In contrast, students in other graduate programs face stricter limits of $20,500 annually with a $100,000 lifetime cap.

The rumor about this reclassification spread rapidly across social media platforms, with many posts claiming the Department had already implemented the changes. While the proposal is real, it has not yet been finalized, with the Department expecting to release final rules in spring 2026.

Ellen Keast, a Department of Education spokesperson, defended the proposal in an emailed statement, saying the agency is using the same definition of “professional degree” that has been in place for decades. “We’re not surprised that some institutions are crying wolf over regulations that never existed because their unlimited tuition ride on the taxpayer dime is over,” Keast stated.

The Department’s proposed interpretation relies on a 1965 regulation that defined professional degrees as those signifying “completion of the academic requirements for beginning practice in a given profession and a level of professional skill beyond that normally required for a bachelor’s degree.” The original definition listed examples including Pharmacy, Dentistry, Veterinary Medicine, Law, Medicine, and several other fields.

Under the new proposal, only programs with the same four-digit Classification of Instructional Programs (CIP) code as those original examples, plus clinical psychology, would qualify as “professional degrees” for student loan purposes. CIP codes are standardized classifications developed by the federal government to identify similar educational programs across institutions.

This narrow interpretation would effectively exclude numerous healthcare and education-focused graduate programs from the higher loan limits, despite many requiring advanced licensure and extensive clinical training.

Healthcare industry groups have expressed concern that the policy could exacerbate existing workforce shortages in critical fields like nursing, where advanced practice providers are already in high demand. Education advocates worry that reduced loan availability might discourage students from pursuing these essential careers, particularly as these professions often offer lower starting salaries compared to other graduate-level occupations.

The policy emerges amid broader efforts by the Trump administration to reform federal student lending, which the administration has characterized as financially unsustainable. Critics of the proposal argue it devalues essential healthcare and education professions, while supporters maintain it represents a return to more conservative lending practices intended to protect both taxpayers and students from excessive debt.

It’s important to note that some counseling degrees would still be classified as professional degrees under the proposal, specifically those falling under CIP code 42.28 for “Clinical, Counseling and Applied Psychology.”

As the Department of Education moves through its rulemaking process, stakeholders from affected industries continue to provide feedback. The final rules, expected next spring, will determine whether these graduate programs officially lose their “professional degree” designation for federal student loan purposes.