By Kritika Agarwal
On April 30, the Department of Education announced the release of a final rule that implements new caps on how much students can borrow for graduate and professional education. The new caps will make it significantly harder for Americans to attend law school and medical school or to obtain training for professions, including nursing, that require advanced education.
New loan limits
The department’s Reimagining and Improving Student Education (RISE) final rule makes sweeping changes to how Americans finance the cost of graduate and professional education. Among other things, starting July 1, 2026:
- Graduate students will be subject to a lifetime cap of $100,000 in federal loans (including undergraduate loans) and an annual limit of $20,500.
- Students pursuing any of an arbitrarily selected group of 11 “professional” degrees will be eligible to borrow up to $50,000 annually and up to $200,000 in aggregate.
- The list of professional degrees eligible for higher loan amounts excludes dozens of programs where there is a need for more workers, including advanced practice nursing, physical therapy, occupational therapy, respiratory therapy, physician associate, speech-language pathology, architecture, social work, and others.
- Grad PLUS loans, which had been available to graduate and professional students to pay for expenses not covered by other financial aid, will be eliminated.
A summary of these and other provisions in the RISE final rule is available on the Department of Education’s website.
Loan caps limit student choice, push students toward private loans
Recent analyses have found that 40% of all graduate students borrowed from the federal government to pay for their education in 2020, and that 28% of recent graduate and professional students borrowed more than the loan limits the Department of Education is now imposing.
The new loan caps and the elimination of Grad PLUS loans mean that many of these students will now need to turn to private loans – which generally have fewer consumer protections and are not eligible for income-driven repayment – to finance their education.
However, many students from low- and middle-income families may not qualify for private loans or wish to assume private debt. In these instances, students may simply forgo advanced education, exacerbating workforce shortages in healthcare and other critical professions.
The fact that the department is choosing to implement these new loan caps this July also creates chaos for students planning to attend graduate or professional programs this fall. By this point in the admissions cycle (i.e. end of April), students have generally accepted admission and institutions have made financial aid offers, many of which will now need to be amended. Students accepted into these programs based on their merit may find that, because of the new loan caps, the programs they were planning to join this fall are now simply out of reach.
As AAU noted in a comment letter earlier this year, “Implementing this policy shift with so little lead time could be devastating to students who lack financial resources or outside support to absorb the impact.” The short timeframe will also have a negative impact on institutions, who will be faced with insufficient time to revise their policies and procedures “to implement a fundamental change in how graduate and professional student aid is delivered.”
“The Department of Education’s final rule on the student loan components of the H.R. 1 reconciliation bill is incredibly disappointing. The timing could not be worse for students currently going through the graduate and professional school admission process,” said CJ Powell, AAU’s associate vice president for government relations and public policy. “Programs omitted from the list are in critical areas of national need, including nursing, social work, and physical therapy – and the rule will result in even greater shortages in sectors where our country needs more investment and expertise, not less,” he added.
Ultimately, the new caps will sharply restrict Americans’ ability to choose the graduate or professional program that best fits their goals. Instead of selecting programs based on academic quality or alignment with their professional goals, students will be forced to enroll in less-suitable programs, delay further education, or abandon their plan altogether.
Congress should call on the Department of Education to engage in new rulemaking to expand the list of professional programs to include programs that are relevant to the current and future economic and societal needs of our country.
Kritika Agarwal is assistant vice president for communications at AAU.
Additional Resources:
Congress Must Delay Implementing New Graduate and Professional Loan Caps (April 2026)
AAU Urges Education Department to Delay Implementation of Loan Caps on Graduate and Professional Students (March 2026)
Proposal to Implement Loan Caps Threatens Access to Professional Degree Programs (November 2025)