Student loan borrowers subject to higher borrowing caps than expected

Some graduate students will be able to take out more federal student loans than previously expected following a recent court decision.

Under President Donald Trump’s “big, beautiful bill” starting July 1, new graduate students would be subject to annual federal student loans of $20,500, while professional students would be able to borrow up to $50,000.

But a federal judge in Washington last week froze the U.S. Department of Education’s definition of “vocational degree”; Judge Beryl A. Howell of the U.S. District Court for the District of Columbia said the agency narrowed the scope of those degrees during the regulatory process beyond what Congress intended.

“This latest federal decision changes the picture quite a bit,” said Kathleen Boyd, CFP and founder of Student Loan Savvy in San Diego, because it “opens the door for more graduate programs to qualify for higher annual federal loan limits.”

Here’s what students need to know about debt ceiling changes.

In trying to implement the OBBBA changes, the Department of Education narrowed the definition of a vocational degree from the government’s definition. long standing Higher education expert Mark Kantrowitz said the interpretation of the word is correct.

Ultimately, the Trump administration determined that only 11 degrees fit the label, including medicine, dentistry and theology. Women were expected to be particularly negatively affected by this change, as more than 70% of those graduating from programs outside the high debt limits were women. a report By EdTrust, a research and advocacy organization.

Directorate of National Education on Monday Released an updated and longer list of over 20 professional degrees this will be subject to larger credit limits, at least for the duration of the court stay. These include registered nursing, physician associates, and speech-language pathologists.

Valerie Fuller, president of the American Association of Nurse Practitioners, applauded the decision.

“This preliminary ruling is an important step for nurse practitioner students, the future health care workforce, and patients who depend on NPs for access to high-quality care,” Fuller said.

Boyd said it’s possible the Trump administration could still change the list or appeal the court’s decision.

For now, he tells clients: “Don’t assume their programs are constrained by the low debt ceiling just yet.”

“I encourage people to stay in touch with their financial aid offices and seek additional guidance from them,” Boyd added.

Nancy Nierman, deputy director of the Education Debt Consumer Assistance Program, a New York nonprofit that helps borrowers with repayment, said the court’s decision does not eliminate OBBBA’s credit limits.

Previously, many graduate students could borrow up to their attendance costs.

Professional students can now borrow up to $50,000 per year, for a total of up to $200,000. Other graduate students are subject to an annual limit of $20,500 and a total limit of $100,000.