Will My Degree Still Qualify for Federal Graduate Loans After 2026?
- OBBB Impact on Federal Loan Policy
- New Degree Classifications
- What Do These Changes Mean For Me?
- Fund Graduate Education
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- The One Big Beautiful Bill Act, signed into law in 2025, introduced major changes to federal student loan rules for graduate and professional students.
- Proposed rules would eliminate the Grad PLUS Loan program and replace it with capped annual and lifetime federal loan limits.
- For graduate students in mental health fields, access to the highest federal loan amounts will likely be limited to doctoral programs in clinical psychology.
Significant changes to federal student loan policy were introduced in the Trump Administration’s One Big Beautiful Bill (OBBB) Act, which was signed into law in July 2025. These loan policy changes are set to take effect for the 2026-2027 academic year, beginning July 2026.
In February 2026, the Department of Education’s latest proposed rule entered a public comment period, meaning changes could still be made before the rule is finalized. However, the OBBB’s new loan policy is expected to impact advanced degrees in psychology, counseling, and clinical social work. Below, we break down what these changes mean and how they could impact your graduate education.
How Will the OBBB Impact Federal Loan Policy?
Under new federal guidance, the Grad PLUS Loan program will be discontinued for new borrowers. Previously, this loan program allowed graduate and professional students to obtain federal loans up to their full cost of attendance.
Beginning on July 1, 2026, new borrowers will be divided into two categories, with two distinct borrowing limits, based on the degree being pursued:
- Professional students will be able to borrow up to $50,000 per year in federal loans, up to a maximum lifetime debt of $200,000 for post-bachelor’s education (whichever limit is reached first).
- Graduate students will be able to borrow up to $20,500 per year in federal loans, up to a maximum lifetime debt of $100,000 for post-bachelor’s education (whichever limit is reached first).
- All borrowers will be able to incur up to a combined lifetime limit of $257,500 across undergraduate, graduate, and professional federal loans, excluding Parent PLUS Loans.
Defining the “Professional” Degree
Under new federal guidance, as currently drafted, professional programs will need to meet the following criteria:
- Award a doctoral-level degree
- Require at least six years of total postsecondary instruction
- Satisfy minimum requirements for professional licensure
- Fall within one of the following fields: pharmacy, dentistry, veterinary medicine, chiropractic, law, medicine, optometry, osteopathic medicine, podiatry, theology, or clinical psychology
Programs that do not meet these criteria will be considered “graduate” degrees, regardless of cost, academic rigor, clinical requirements, or licensure outcomes.
How Will My Degree Be Classified Under the New Rules?
Under new federal guidance, most post-bachelor’s programs across mental health fields, including psychology, counseling, and clinical social work, will be classified as graduate degrees. Professional programs with the highest loan ceilings are limited to those required for psychologist licensure.
| Degree | Classification | Annual Loan Cap |
|---|---|---|
| Doctorate in Clinical Psychology | Professional | $50,000 |
| Doctorate in Counseling Psychology | Professional1 | $50,000 |
| Doctorate in Psychology (Other Subfields)2 | Graduate | $20,500 |
| Doctor of Social Work (DSW) | Graduate | $20,500 |
| Education Specialist (Ed.S.) in School Psychology | Graduate | $20,500 |
| Master’s in Psychology3 | Graduate | $20,500 |
| Master’s in Counseling3 | Graduate | $20,500 |
| Master of Social Work (MSW) | Graduate | $20,500 |
What Do These Changes Mean For Me?
If you are an undergraduate borrower, or planning to be, you will need to consider the new lifetime federal loan cap of $257,500 as you plan your education. Any federal loans (excluding Parent PLUS Loans) you take out for undergraduate education will reduce the total amount of federal funding you have available for future graduate and professional education.
If you enrolled in a graduate or professional program before July 2026, the new changes from the OBBB may or may not affect you. You will be considered a legacy borrower if both of the following are true:
- You received at least one federal student loan disbursement before July 2026.
- You remain enrolled in the same degree program during the 2026-2027 academic year.
Legacy borrowers will retain grandfathered access to Grad PLUS loans and may continue borrowing up to their full cost of attendance. If you are not a legacy borrower, or if you plan to start a graduate or professional program after July 1, 2026, the new federal loan caps will apply.
How Can I Fund My Graduate Education without Grad PLUS Loans?
First, remember that federal loans will remain accessible even without the Grad PLUS program. Depending on whether your degree qualifies as a graduate or professional program, you can still borrow an annual maximum of $20,500-$50,000, up to $100,000-$200,000 over the course of your advanced education.
You can also secure other sources of funding for your education. Graduate and doctoral students may pursue teaching assistantships, research fellowships, scholarships and grants, and employer tuition reimbursement programs.
Finally, private student loans remain an option, although these loans may have less favorable borrowing terms than their federal counterparts. Always carefully review interest rates, repayment options, and borrower protections before taking out a private loan.
For some borrowers, the new federal loan caps will still be enough to cover graduate tuition and fees. To put the new limits into perspective, the latest data from the National Center for Education Statistics shows the following average annual costs for psychology and counseling programs:
| Degree Type | Average Tuition and Fees** |
|---|---|
| Master’s Degree | $16,673 |
| Doctoral Degree (Professional) | $35,825 |
| Doctoral Degree (Non-Professional) | $18,972 |
** 2019-2020 data, adjusted for inflation
Source: NCES DataLab
| Degree Type | Average Tuition and Fees** |
|---|---|
| Master’s Degree | $19,359 |
| Doctoral Degree (Professional) | $43,001 |
| Doctoral Degree (Non-Professional) | $26,471 |
** 2019-2020 data, adjusted for inflation
Source: NCES DataLab
