Graduate vs Professional Degree Student Loans: What the New Rules in 2026 Mean for You

Graduate vs Professional Degree Student Loans: What’s Really Changing in 2026?

Thinking about grad school and hearing things like “Grad PLUS is going away” or “my program might not count as professional anymore”?

You are not imagining it. The whole graduate vs professional degree student loans structure is about to shift, and the details matter a lot for how much you can borrow.

One question keeps coming up:

“Did these new professional degree designations just happen?”

The honest answer: the law has been around for a few months, but the specific definition of who counts as “professional” for loan purposes is very recent. That definition is also the source of most of the controversy.

Let’s walk through what changed, when it changed, and what it means for your grad school budget.

Step 1: The Law Has Been in Place Since July 2025

In July 2025, Congress passed and the President signed the One Big Beautiful Bill Act (OBBBA). That law is the foundation for the new graduate vs professional degree student loans setup.

OBBBA did three big things for graduate borrowers:

1. Eliminated Grad PLUS for new borrowers starting July 1, 2026
   
2. Replaced “borrow up to cost of attendance” with hard federal loan caps
   
3. Ordered the Department of Education to split programs into:
   • Graduate programs, and
     
   • Professional degree programs
     for purposes of higher borrowing limits
     

So the requirement to separate graduate vs professional degree student loans has been written into law since mid 2025. That part is not new, even if it feels new in the headlines.

Step 2: The Definition of “Professional Degree” Is Brand New

What is new is the way the Department of Education decided to define “professional degree.”

Here is the rough timeline:

• July 2025: OBBBA becomes law. Grad PLUS is scheduled to end for new borrowers in 2026, and the Department of Education is told to create two tiers of loan limits.
  
• November 2025: The Department’s negotiated rulemaking committee reaches preliminary consensus on:
  
  • the exact list of professional degrees, and
    
  • a multi part rubric for deciding which programs qualify for the higher borrowing caps.
    
• Early 2026 (expected): That consensus language is turned into a formal Notice of Proposed Rulemaking (NPRM), opened for public comment, then finalized.
  

So if you are wondering whether the designations just happened, here is the nuance:

• The law that split graduate vs professional degree student loans is months old.
  
• The specific designations, including the exclusions that affect fields like nursing, physical therapy, and social work, were just agreed to in November 2025.
  

That is why this topic suddenly exploded. The statute has been there since July. The regulatory details that decide who is in and who is out were just locked in by negotiators.

The New Loan Caps: Two Tiers, Big Differences

Starting July 1, 2026, new borrowers will not be able to rely on Grad PLUS to fill any gap between other loans and the full cost of attendance. Instead, you will be working within two sets of federal caps.

1. Graduate Programs (Non Professional)

These are the regular graduate programs under the new rules.

• Annual borrowing limit: $20,500
  
• Aggregate graduate limit: $100,000
  

Many master’s degrees and non professional doctoral programs are expected to fall in this category.

2. Professional Degree Programs

Professional degree programs get higher federal caps:

• Annual borrowing limit: $50,000
  
• Aggregate professional limit: $200,000
  

So the core distinction in graduate vs professional degree student loans is simple but powerful. The label on your program determines whether you can borrow up to $100,000 or up to $200,000 in federal loans at the graduate level.

What Actually Counts as a “Professional Degree”?

The Department of Education built its definition on an existing list in federal regulations, then added a structured rubric.

Under that framework, programs in the following fields are treated as professional degrees, as long as they meet the usual accreditation and licensure expectations:

• Medicine (M.D.)
  
• Osteopathic Medicine (D.O.)
  
• Dentistry (D.D.S. or D.M.D.)
  
• Pharmacy (Pharm.D.)
  
• Veterinary Medicine (D.V.M.)
  
• Optometry (O.D.)
  
• Podiatry (D.P.M.)
  
• Chiropractic (D.C. or D.C.M.)
  
• Law (J.D. or L.L.B.)
  
• Theology (M.Div. or M.H.L.)
  
• Clinical Psychology (certain Psy.D. and Ph.D. programs that are structured as practice doctorates)
  

Beyond that explicit list, a program can still qualify as a professional degree if it meets all of these conditions:

1. It shares the same 4 digit Classification of Instructional Programs (CIP) code as one of the named professional fields or is tightly aligned with them.
   
2. It represents completion of the education needed to begin practice in that profession.
   
3. It is effectively a doctoral level program (with a narrow exception for the Master of Divinity), requiring at least six academic years of postsecondary study, including two or more years beyond the bachelor’s degree.
   
4. It generally requires licensure to start practicing.
   

If your program does not meet this checklist, it is treated as a regular graduate program even if it feels just as “professional” in everyday language.

Who Is Left in the Lower Graduate Tier?

Here is where the graduate vs professional degree student loans debate gets heated.

Many fields that require a graduate degree, intensive clinical training, and state licensure are not included in the professional list. That means students in those programs will be limited to the $20,500 per year and $100,000 lifetime caps.

Programs widely expected to remain in the lower graduate tier include:

• Advanced Practice Nursing (Nurse Practitioners, Nurse Anesthetists, Clinical Nurse Specialists, and others)
  
• Physician Assistants or Associates
  
• Physical Therapy (DPT)
  
• Occupational Therapy
  
• Social Work (M.S.W.)
  
• Master of Public Health (M.P.H.)
  
• Accounting and related Master of Accountancy programs
  

These students will still have access to federal loans, but the maximum federal amount may fall short of total program costs. For many, that will mean:

• More pressure to choose lower cost schools,
  
• Heavier use of scholarships, assistantships, or employer tuition benefits, or
  
• Greater reliance on private loans to close the gap.
  

Professional associations in health care, mental health, and social services have raised alarms that these choices could shrink pipelines into already stressed professions and deepen workforce shortages.

What About Repayment and PSLF?

The new loan caps are the headline, but they are not the only change coming.

The Repayment Assistance Plan (RAP)

For loans first disbursed on or after July 1, 2026, most new borrowers will choose between:

• A revised Standard Plan with fixed payments, and
  
• A new Repayment Assistance Plan (RAP) that:
  
  • Bases payments on your income
    
  • Sets minimum payments even at very low income levels
    
  • Provides some interest relief, so balances grow more slowly when payments are low
    
  • Can run up to 30 years before any remaining balance is forgiven
    

So the way you repay your graduate vs professional degree student loans will also look different from the current menu of income driven plans.

PSLF Employer Rules

Public Service Loan Forgiveness still promises potential forgiveness after 120 qualifying payments while working for a qualifying employer. However, the rules are tightening around what counts as a qualifying employer.

Certain organizations can be excluded if they are judged to have a “substantial illegal purpose.” If that happens, employees can lose eligibility for future PSLF credit while working there, although past qualifying payments are expected to remain.

If PSLF is part of your long term strategy, you will need to pay more attention not only to your job, but also to your employer’s status.

What To Do If You Plan To Start Grad or Professional School

If your brain feels a little overloaded right now, you are not alone. Here is a simple, practical game plan, plus how our partnership with Juno can help you protect your wallet.

1. Enroll With Juno Before You Borrow

Juno is a free platform that uses group negotiating power to help students and families secure better private student loan deals than they would typically get on their own. Here is why anyone considering graduate school should enroll with Juno before shopping for private loans:

• Free to join
  There is no cost to sign up and see the negotiated offers.
  
• Group negotiation
  Juno pools thousands of students together and then negotiates with lenders on the group’s behalf. Lenders compete to serve a large, organized group, which can lead to lower interest rates and better terms than a single borrower usually gets.
  
• Side by side comparison
  You can compare offers, understand the tradeoffs between fixed and variable rates, look at term lengths, and see how monthly payments would change.
  
• Leverage, not pressure
  You are not locked into a specific lender. You can use Juno’s offers as a benchmark, then decide what works best for you and your family.
  

In a world with tighter federal loan caps for graduate vs professional degree student loans, having a trusted partner that fights for better private loan pricing is a big deal. If your program costs are likely to exceed the federal limits, enrolling with Juno early puts you in position to shop smarter instead of panicking at the last minute.

2. Get Clear on Timing

Starting before July 1, 2026
You may still have access to Grad PLUS and the current menu of income driven repayment plans, along with some transition protections written into the law.

Starting after July 1, 2026
Plan from the beginning for the new federal loan caps and the choice between RAP and the revised Standard plan. You will not be able to rely on Grad PLUS to fill the entire gap between your other loans and the cost of attendance.

3. Ask Your School How Your Program Will Be Classified

When you talk to admissions or financial aid, use a direct question like:

“Under the new rules, will my program be treated under the professional loan limits or the graduate limits?”

Ask for:

• The program’s CIP code
  
• Whether they expect students in your program to fall under the $20,500 and $100,000 caps or the $50,000 and $200,000 caps
  

This one conversation can completely change how you think about your budget, your school list, and how much you will realistically need in private financing.

4. Compare Costs To Caps

Next, look at the total cost of attendance: tuition, mandatory fees, and a realistic number for housing, food, transportation, books, and licensing or exam costs.

Then compare that to your likely federal caps based on your program’s classification.

If your total program cost is higher than your federal borrowing room, you still have options:

• Choose a lower cost or in state program
  
• Secure scholarships, fellowships, or assistantships
  
• Explore employer tuition assistance or tuition reimbursement
  
• Decide how much, if any, private loan borrowing you are comfortable with
  

This is exactly where our partnership with Juno becomes incredibly valuable.

Wrapping It Up: You Have More Power Than You Think

The new rules for graduate vs professional degree student loans are a lot to take in, but you are not powerless in this story. A little strategy goes a long way.

Here is the big picture, simplified:

• Know the rules
  
  • Find out if your program is treated as graduate or professional
    
  • Understand which caps apply to you:
    
    • Graduate: $20,500 per year, $100,000 lifetime
      
    • Professional: $50,000 per year, $200,000 lifetime
      
• Know the price tag
  
  • Add up your total cost of attendance
    
  • Compare it to your federal caps
    
  • Decide how you will cover any gap with:
    
    • School choice
      
    • Scholarships and assistantships
      
    • Employer tuition help
      
    • Private loans only when needed
      
• Use Juno to your advantage
  
  • Free to join
    
  • Uses group negotiating power to push lenders for better rates and terms
    
  • Lets you compare offers side by side so you can borrow smarter, not just faster
    
• Plan repayment with eyes wide open
  
  • Look at how RAP and the revised Standard plan might treat your future income
    
  • Run quick, realistic scenarios for monthly payments and total cost over time
    

Your grad degree can still be a fantastic investment. The key is to be just as intentional about the money as you are about the program. Ask questions, do the basic math, lean on partners like Juno, and you will be in a much stronger spot than the people who simply click “accept” on whatever loan pops up first.