As revealed in our latest blog, a recent federal court ruling on June 25, 2026, has introduced unexpected changes to federal student loan policies, just days before they were scheduled to take effect. A federal judge temporarily paused a portion of the Department of Education’s new rule regarding how graduate programs are classified for federal borrowing.
What You Need to Know
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The Ruling: The court temporarily halted the Department of Education’s implementation of new criteria for classifying “professional degrees.”
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The Controversy: The rule was challenged by groups like the American Association of Nurse Practitioners, who argued that the Department defined “professional degree” too narrowly. There was significant concern that essential fields like nursing and education would be excluded from the higher borrowing tier, leaving students in these programs with significant funding gaps.
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Borrowing Caps: The broader system remains in place. Most graduate programs are currently limited to $20,500 per year ($100,000 total), while qualifying professional programs can borrow up to $50,000 annually ($200,000 total).
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What Remains Unchanged: This ruling does not eliminate federal loan caps, nor does it halt the ongoing phaseout of Grad PLUS loans for new borrowers.
Planning for Your Education
While this ruling may offer short-term flexibility for certain programs that were at risk of being reclassified, the overall landscape of federal funding remains tightened compared to previous years. Graduate students should continue to prepare for potential funding gaps between federal aid and the total cost of attendance.
When planning your finances, consider exploring:
- Institutional aid and scholarships.
- Personal savings and payment plans.
- Private student loans as a supplement to federal funding.
If you are trying to estimate a potential funding gap, check out Ascent’s Grad School Funding Calculator to compare your school-certified costs with the aid you may already have available.
To better understand what the Grad PLUS phaseout could mean for students and schools, check out our blog, What Does the End of Grad PLUS Loans Mean for Higher Education?