The One Big Beautiful Bill Act (OBBB) included long-overdue limits on federal loans to graduate students. While graduate loans have been effectively unlimited, going forward, most students will be capped at borrowing up to $20,500 per year, or $100,000 in aggregate. This policy change should hold down student debt burdens—and make it harder for graduate programs to hike tuition.
However, the law includes an exception to these caps. Students in programs that award “professional degrees” can borrow up to $50,000 per year, or $200,000 in aggregate. This carveout is meant to provide additional borrowing capacity for students in high-return programs that are extremely expensive to operate, such as medicine. But now, graduate programs that have historically not identified as “professional” are trying to get in on the action—which threatens to undermine the intent of OBBB and explode student debt.
The Education Department held a public hearing last Thursday, at which numerous speakers representing graduate schools clamored for their programs to be labeled “professional.” A representative of the Council on Social Work Education argued that “a [Master of Social Work] provides full professional preparation, similar to a J.D. in law or an M.D. in medicine, and we think it should be categorized in the same respect.”
Obviously, universities offering social work degrees will rake in more cash if their students can borrow up to $50,000 per year for tuition—but it may not be such a good idea for students to borrow so much for a lower-wage profession. If the Education Department is not careful about how it classifies programs claiming to be “professional,” hundreds of thousands of students could wind up with debt burdens they cannot afford.
So, what exactly is a professional degree? OBBB refers to the following definition in the Code of Federal Regulations:
A degree that signifies both completion of the academic requirements for beginning practice in a given profession and a level of professional skill beyond that normally required for a bachelor’s degree. Professional licensure is also generally required. Examples of a professional degree include but are not limited to Pharmacy (Pharm.D.), Dentistry (D.D.S. or D.M.D.), Veterinary Medicine (D.V.M.), Chiropractic (D.C. or D.C.M.), 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.), and Theology (M.Div., or M.H.L.).
This definition contains mostly fields we commonly consider professional, such as medicine, dentistry, and law. With the exception of theology, these programs are lucrative but expensive—undoubtedly what the framers of OBBB had in mind when they drafted the legislation. Professional school loan limits are meant to apply narrowly. But colleges intend to exploit ambiguity in the definition to create a loophole you could drive a truck through.
The Education Department’s upcoming rulemaking will determine how to classify programs as standard or professional. One useful guidepost is how universities have historically identified their own programs. Each year, universities are required to report the number of degrees they confer by field of study, including whether those credentials are “professional practice” degrees.
The following table lists fields of study in which the nation’s universities collectively awarded at least 10 “professional practice” degrees during the 2022–23 academic year. This list most likely reflects Congress’ understanding of what a “professional degree” is at the time OBBB passed.
It is evident that the “professional” definition applies narrowly. Ninety-seven percent of professional degrees are awarded in health care fields (including veterinary medicine) or law. While there are a smattering of other fields where universities have awarded professional degrees, this is not the norm. Social work programs, for instance, awarded just 220 professional degrees in 2022–23, compared to more than 35,000 social work graduate degrees not classified as professional.
The Education Department should treat opportunistic attempts to reclassify graduate degrees as “professional” with great skepticism. If a school has historically reported its social work program as a master’s degree, it should not be allowed to reclassify the program as professional now that there’s an economic incentive attached. New programs of study should not be allowed to call themselves “professional” if outside the fields of study that have historically granted professional degrees. And programs within one of those fields should have to meet strict requirements with regard to length and professional licensure.
In OBBB, Congress struck a great victory against rising student debt. However, colleges may undermine this victory if the Education Department is not vigilant. Schools will undoubtedly seek to reclassify degrees as professional to allow students to take on more debt and charge higher tuition. To defend Congressional intent and save students from crushing debt, the Department must stop them.