Student loan borrowers subject to higher borrowing caps than expected

Some graduate students will be able to borrow more in federal student loans than previously expected after a recent court order.

Under President Donald Trump’s “one big beautiful bill act,” starting July 1, new graduate students will be subject to an annual federal student loan cap of $20,500 a year, while so-called professional students can take out up to $50,000.

But a federal judge in Washington froze last week the U.S. Department of Education’s definition of a “professional degree,” Judge Beryl A. Howell, of the U.S. District Court for the District of Columbia, said that the agency, during its regulatory process, had narrowed the scope of those degrees beyond what Congress intended.

“This latest federal ruling changes the picture quite a bit,” said Kathleen Boyd, a CFP and founder of Student Loan Savvy in San Diego, because it “opens the door for more graduate programs to qualify for the higher annual federal loan limits.”

Here’s what students need to know about the borrowing cap changes.

While it worked to implement the OBBBA changes, the Education Department narrowed the definition of a professional degree from the government’s longstanding interpretation of the word, said higher education expert Mark Kantrowitz.

In the end, the Trump administration identified just 11 degrees, including medicine, dentistry and theology, that fit under the label. Women were expected to be especially hard hit by the change, as they account for more than 70% of graduates in programs excluded from the higher borrowing limits, according to a report by EdTrust, a research and advocacy organization.

On Monday, the Education Department published an updated and longer list of over 20 professional degrees that will be subject to the larger loan caps, at least during the court’s stay. Those include registered nursing, physician associates and speech-language pathologists.

Valerie Fuller, president of the American Association of Nurse Practitioners, applauded the ruling.

“This preliminary ruling is an important step for nurse practitioner students, the future health care workforce and the patients who depend on NPs for access to high-quality care,” Fuller said.

It’s possible the Trump administration will still change the list or appeal the court’s decision, Boyd said.

For now, she is telling her clients, “Not to assume their program is limited to the lower borrowing cap just yet.”

“I encourage folks to stay connected with their financial aid offices and wait for additional guidance from them,” Boyd added.

Importantly, the court’s ruling did not eliminate the OBBBA’s loan caps, said Nancy Nierman, assistant director of the Education Debt Consumer Assistance Program in New York, a nonprofit that helps borrowers navigate repayment.

Previously, many graduate students were able to borrow up to the cost of attendance.

Now, professional students can borrow up to $50,000 a year, for a total of $200,000. Other graduate students are subject to an annual cap of $20,500 and an aggregate limit of $100,000.