A federal district court has temporarily stayed key parts of the Department of Education’s new “professional degree” definition, just days before the July 1 effective date for the new graduate and professional federal loan limits.
Importantly, the court did not block the new statutory loan caps. The graduate and professional caps are still scheduled to take effect. But the court did temporarily set aside the Department’s narrower regulatory test for deciding which programs count as “professional” programs for purposes of the higher federal loan limits.
Under the Department’s final rule, only a limited group of programs would have been treated as professional programs, with all other graduate programs subject to the lower graduate borrowing limits. The court concluded that ED likely went beyond what Congress allowed when it added new restrictions to the professional-degree definition and effectively treated the listed examples as an exclusive list.
For now, the court’s order temporarily blocks ED from enforcing its narrowed interpretation. In general terms, a professional degree is one that signifies completion of the academic requirements for beginning practice in a profession, reflects a level of professional skill beyond the bachelor’s level, and generally requires professional licensure. The historical list of examples remains important, but the court rejected the idea that the list is necessarily exhaustive.
This does not mean every graduate program automatically receives the higher professional loan limits, nor does it mean the court has ordered ED to treat any specific program, such as physician assistant programs, as professional programs. The court expressly left program-specific determinations to ED under the proper standard.
The immediate practical effect is that programs excluded by ED’s narrowed rule—particularly in health professions and other licensure-based fields—may have a stronger pathway to professional-degree treatment than they appeared to have under the final rule. A change in designation could reduce the immediate exposure for certain programs and institutions, particularly allied health and advanced nursing programs.
At the same time, uncertainty remains. ED may appeal, may issue guidance, or may take additional implementation steps. The court also directed the parties to submit a proposed schedule for further proceedings by July 2. Institutions should therefore be careful not to overread the ruling or treat it as a final resolution.
For COHEAO members, the main takeaways are:
- The new federal loan cap framework is still moving forward.
- The Department’s narrowed professional-degree test has been temporarily stayed.
- The listed example fields remain recognized, but the list should not be treated as automatically exhaustive while the stay is in effect.
- Program-specific determinations remain unsettled and will likely require ED guidance, institutional analysis, and counsel review.
- The ruling may reduce immediate exposure for some licensure-based health and professional programs, but it does not eliminate the broader financing and implementation challenges created by the new caps.
COHEAO will continue monitoring the case, ED guidance, and implementation issues affecting campus financing, institutional loan programs, student accounts, and related member operations.
This is a fast-moving legal and operational development. Institutions should consult their own legal counsel before making final compliance or packaging decisions.
For questions on this decision or the broader impact of the new loan caps, please contact Wes Huffman at wes@campusaccesspartners.com.
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