Education Rule Reclassifies Nursing and Cuts Graduate Loan Access, Sparking Outcry

The U.S. Department of Education, in changes tied to the "One Big Beautiful Bill Act" (OBBBA), has removed post‑baccalaureate nursing programs from its definition of "professional" degrees and announced plans to eliminate the Grad PLUS loan program for graduate and professional students. Taken together, these moves would tighten federal borrowing limits for many advanced nursing pathways and other clinical programs, a shift that nursing leaders warn could worsen workforce shortages and limit training for advanced practice and academic roles.

What changed

The department said negotiators reviewed multiple regulatory provisions and agreed to a revised definition of "professional" students and programs. Under the proposed changes, which are scheduled to take effect for new borrowers in July 2026, annual and aggregate federal loan caps would be introduced: $20,500 per year for graduate students (with a $100,000 aggregate limit) and $50,000 per year for professional students (with a $200,000 aggregate limit). Previously, graduate borrowers could take federal loans up to the full cost of attendance, including through the Grad PLUS program.

Who is affected

By excluding nursing post‑baccalaureate programs from the professional‑degree category, the department would subject many nursing pathways — including programs that prepare nurse practitioners, physician assistants, physical therapists and other advanced clinicians — to the tighter graduate caps rather than the higher professional‑student limits. Eliminating Grad PLUS would remove a federal option graduate and professional students have used to cover tuition and other education costs not met by other aid.

Reactions from nursing leaders

Jennifer Mensik Kennedy, president of the American Nurses Association, said the change could deepen an already serious shortage of nurses and disrupt pathways for nurses to pursue advanced practice and educator roles. "I don’t know why we would take this away," Kennedy said, warning that reduced access to federal loans could deter nurses from training as clinical faculty and leaders.

The American Association of Colleges of Nursing (AACN) issued a formal appeal asking department leaders to reconsider, calling the proposal "deeply concerning" and warning that finalizing it would be devastating for an already strained nursing workforce and for the pipeline of clinical faculty.

Department response

The department defended the effort as a response to unsustainable borrowing and high‑cost graduate programs that do not deliver commensurate outcomes. A department spokesperson said the revised, consensus‑based definition aligns with historical precedent and was developed by a committee that included higher education representatives. The spokesperson also characterized some media coverage of the change as misleading.

Potential consequences and next steps

Advocates warn the combined effect of narrowed "professional" classifications and the end of Grad PLUS could leave many students with funding gaps, increasing reliance on private loans, institutional aid, scholarships, or personal financing. Nursing programs say that could limit enrollment in graduate programs, reduce the supply of clinical faculty, and constrain the broader health‑care workforce.

The proposal is part of a regulatory process; if advanced, it will move through rulemaking and public comment before becoming final. Nursing organizations and academic leaders are urging the department to reconsider or exempt clinical nursing programs to avoid unintended workforce harms.

Timeline: The department says the new caps would apply to new borrowers beginning July 2026 pending final rulemaking.