Definitions of Professional Student and Graduate Student Affecting Loan Limits
Description
Regulation 34 CFR 685.102 Definitions. Graduate Student and Professional Student is developed to implement provisions in the One Big Beautiful Bill Act (OB3), enacted on July 4, 2025, which amended the Higher Education Act of 1965. The Federal statute establishes separate annual and aggregate loan limits for graduate and professional students. The statute defines a professional student as one enrolled in a program leading to a professional degree, as defined in 34 CFR 668.2, which indicates a designated group of programs, such as law, medicine, pharmacy, or theology. In contrast, graduate students are enrolled in programs leading to other types of graduate credentials, such as master’s or doctoral degrees in academic or research disciplines. This distinction significantly affects borrowing eligibility and total loan amounts, making the regulatory definition of a professional student a key issue in the current negotiated rulemaking process.
In the final days of the negotiated rulemaking, the U.S. Department of Education proposed a draft definition of a professional student for 34 CFR 685.102 that would include all programs already in the 34 CFR 668.2 list, as well as clinical psychology and any program that (1) requires a doctoral degree, (2) shares a four-digit Classification of Instructional Programs (CIP) code with a program already on the list, and (3) requires a license. The Department explained that clinical psychology fits within existing regulatory rationale and that this approach would add 44 additional degree programs within the same CIP codes.
For the final regulations, the Department did not make changes to the proposed definition of a professional student. The final regulation maintains the 11 program areas: medicine, osteopathic medicine, podiatry, chiropractic, optometry, pharmacy, dentistry, veterinary medicine, law, theology, and clinical psychology. This definition affects loan caps as directed in 34 CFR 685.203. Students in the designated professional programs are eligible for up to $50,000 per year (maximum $200,000 total). All other graduate students are limited to $20,500 per year (maximum $100,000 total).
Action to be taken
- Understand the effect of this change and its impact on the institution related to programs and loans.
- Share information across the institution to manage possible process changes.
Effective Date
July 1, 2026
Resources
- Negotiated Rulemaking for Higher Education 2025 (RISE Committee)
- Consensus Language for 34 CFR 685.101 Definitions and Graduate Student and Professional Student
- New OB3 Federal Statute: SEC. 81001. ESTABLISHMENT OF LOAN LIMITS FOR GRADUATE AND PROFESSIONAL STUDENTS AND PARENT BORROWERS; TERMINATION OF GRADUATE AND PROFESSIONAL PLUS LOANS.
- 34 CFR 668.2 General Definitions: Professional degree
- U.S. Department of Education Press Release - U.S. Department of Education Concludes Negotiated Rulemaking Session to Implement the One Big Beautiful Bill Act's Loan Provisions
- From RISE to AHEAD: What We Learned and What Comes Next in Federal Rulemaking; WCET Frontiers, 12/4/2025
- Press Release from the Department: U.S. Department of Education Issues Proposed Rule to Make Higher Education More Affordable and Simplify Student Loan Repayment (1/29/26)
- Notice of Proposed Rulemaking (NPRM)- Reimagining and Improving Student Education (Published 1/30/2026)
- The Department of Education’s Proposed Rule to Define “Professional Student”: Frequently Asked Questions; CRS Product (Library of Congress) (2/24/26)
- Final Regulations: Reimagining and Improving Student Education: Federal Student Loan Program (Published 5/1/2026)
- Members of Congress introduced a Bicameral Joint Resolution under the Congressional Review Act (CRA) to rescind the final rule (5/7/2026).