By Katherine Demedis and Alyson Raphael
On June 24, 2026, U.S. District Judge Beryl Howell ruled on a request for a court injunction and stay blocking portions of the U.S. Department of Education’s (“ED”) rule classifying degrees as “professional” or “graduate” for purposes of new loan limits enacted by Congress. The court’s order stays implementation of the professional degree definition at 34 C.F.R. § 685.102(i) which would have gone into effect on July 1, 2026. After the court issued its order, ED published guidance clarifying the additional degrees that will be considered “professional” under the terms of the stay.
New Loan Limits
In July 2025, the One Big Beautiful Bill Act (OBBBA, also known as the Working Families Tax Cuts Act or H.R.1), eliminated the Graduate PLUS loan program, which allowed graduate and professional students to borrow up to their cost of attendance less other financial aid, and capped graduate student borrowing at $20,500 in federal loans annually ($100,000 aggregate) and professional student borrowing at $50,000 annually ($200,000 aggregate). Additionally, a lifetime federal loans limit of $257,500 applies. The statute incorporated by reference the existing regulatory definition of “professional degree” at 34 C.F.R. § 668.2 to determine who qualifies for the “professional” loan limits.
On May 1, 2026, ED published the Reimagining and Improving Student Education Final Rule (the “RISE Final Rule”), which implemented Congress’ new loan limits for graduate and professional students. The RISE Final Rule established a new definition of a “professional degree” at 34 C.F.R. § 685.102 that narrowed the range of fields that could be considered “professional” and subject to the higher loan limits.
Litigation
The RISE Final Rule was quickly challenged in several lawsuits, including in a set of consolidated cases American Association of Nurse Practitioners v. McMahon, Case 1:26-cv-01780, brought by a group of plaintiffs representing nurse practitioners and other professions, and PA Education Association v. U.S. Department of Education, Case 1:26-cv-01941, by the American Academy of Physician Associates (AAPA) and the PA Education Association (PAEA).
Judge Howell’s June 24 Order granted Plaintiffs’ motion for a stay of part of the professional degree definition that added material changes to the definition that Congress codified. The court agreed that Plaintiffs had “shown that the Rule’s definition of ‘professional degree’ is likely contrary to law because Congress intended the Department to apply the preexisting definition of ‘professional degree,’ that they would suffer irreparable harm should the Rule go into effect, and that the balance of equities and the public interest are in their favor.”
Accordingly, ED must adhere to the preexisting three-part test under 34 C.F.R. § 668.2 as codified by Congress to determine which degrees are “professional degrees.” By this test, there are three criteria for a program to qualify as a professional degree:
- the degree signifies “completion of the academic requirements for beginning practice in a given profession”;
- the degree signifies “a level of professional skill beyond that normally required for a bachelor’s degree”; and
- licensure is “generally required.”
The court also affirmed the list of fields provided as examples of professional degrees under the new regulation at 34 C.F.R. § 685.102(ii), and confirmed that the list is non-exhaustive: Pharmacy (Pharm.D.), Dentistry (D.D.S. or D.M.D.), Veterinary Medicine (D.V.M.), Chiropractic (DC or DCM), Law (L.L.B. or J.D.), Medicine (M.D.), Optometry (O.D.), Osteopathic Medicine (D.O.), Podiatry (D.P.M., D.P., or Pod.D.), Theology (M.Div., or M.H.L.), and Clinical Psychology (Psy.D. or Ph.D.).
Additional litigation challenging ED’s professional degree definition remains pending. In addition to the consolidated cases that resulted in Judge Howell’s June 24 Order, challenges are also pending in State of Maryland v. U.S. Department of Education, Case 1:26-cv-01957, and American Nurses Association v. U.S. Department of Education, Case 1:26-cv-12443. In the latter, the District Court in Massachusetts held a hearing on July 1, 2026.
Guidance
On June 29, 2026, ED issued guidance clarifying the list of programs that will be treated as granting “professional degrees” which qualify for professional loan limits for the duration of the court’s stay. Instead of just the 11 professions enumerated in the RISE Final Rule, ED’s new guidance recognizes 29 programs as qualifying for professional loan limits, including three nursing degrees, physical and occupational therapy degrees, and physician assistant degrees, among others.
However, ED intends to continue to defend the RISE Final Rule. ED therefore has warned that interim determinations of programs granting “professional degrees” under the court’s stay “may change as litigation in the case proceeds.” ED has also noted that institutions can choose to limit loan amounts of the interim “professional degree” programs to the graduate-level caps to mitigate potential disruption to student borrowers that may arise depending on the outcome of the litigation. If an institution chooses to set program loan limits below the federal maximum professional student loan limits (i.e., at the graduate level), ED’s new regulations at 34 C.F.R. § 685.203(m)(2) require advance notice to students and that the institution explain in writing the need for the institutionally-determined borrowing limitation.
If your institution has any questions about how to proceed, please contact one of the professionals in the Powers Education Group.