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Key Takeaways
The One Big Beautiful Bill Act, signed into law in 2025, introduced major changes to federal student loan rules for graduate and professional students.
The Grad PLUS Loan program ended for new borrowers on July 1, 2026, replaced with capped annual and lifetime federal loan limits.
However, the classifications for which programs qualify for higher professional student loan limits remain unsettled in court and could change due to ongoing litigation.
Major federal student loan changes under the Trump Administration's One Big Beautiful Bill (OBBB) Act took effect on July 1, 2026. These include ending Grad PLUS loans for new borrowers and setting new borrowing limits for graduate and professional students.
However, which programs qualify for the higher professional student loan limits remains unsettled. A federal court temporarily blocked parts of the Department of Education's new definition, and a temporary list of qualifying programs is now in effect.
Below, we explain the new loan limits, proposed professional degree classifications, and what the ongoing court case could mean for you. We'll continue updating this page as new guidance becomes available.
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 the Department of Education's temporarily blocked definition, professional programs generally would need to:
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
These criteria are not currently being used to determine eligibility while the court's stay remains in effect.
How Will My Degree Be Classified Under the New Rules?
While the court case continues, some programs will temporarily qualify for the higher professional student loan limits.
For psychology students, the temporary list includes clinical psychology Ph.D. and Psy.D. programs, along with certain Psy.D. programs in counseling psychology, school psychology, forensic psychology, family psychology, and several other specialties.
Other psychology programs, along with master's programs in psychology, counseling, and social work, generally remain subject to the lower graduate student loan limits.
These classifications are temporary and may change as the litigation continues. Check with your school's financial aid office to confirm how your specific program is currently classified.
| 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 | Professional4 | $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?
You can still access federal student loans without Grad PLUS. Graduate students can borrow up to $20,500 per year, while students in qualifying professional programs can borrow up to $50,000 per year. Which programs qualify for the higher professional limit is currently subject to an ongoing court case.
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 inflationSource: 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 inflationSource: NCES DataLab
