Student Loan Changes in 2026 – What Healthcare Professionals Are Affected?

Major changes to the federal student loan system are set to take effect in 2026, reshaping how graduate and professional students, including many pursuing healthcare careers, will finance their education. For decades, graduate and professional students had access to the same federal loan programs and could borrow up to the full cost of attendance through a combination of Direct Unsubsidized Loans and Graduate PLUS loans. That structure is now shifting, with new borrowing limits and the elimination of a key funding source.

“So on the professional side, Congress did something kind of new,” explained Jill Desjean, director of policy analysis at NASFAA. “Graduate and professional students were never distinguished in any way in terms of their federal student loan eligibility. They all qualified for the same types of loans and the same amounts.”

Under the new law, Congress has established separate loan limits for graduate and professional students, fundamentally changing the amount each group can borrow through federal programs.

Beginning in 2026, graduate students will have a $20,500 borrowing limit under the Direct Unsubsidized Loan Program. Professional students, including those in fields such as medicine, dentistry, and law, will see their annual limit increase to $50,000. While that higher cap may appear to expand access to professional programs with high tuition, it comes with a significant change: the elimination of the Graduate PLUS loan program for new borrowers.

“That’s a big deal in and of itself,” Desjean said, “but it’s an even bigger deal because Congress also eliminates a big funding source for graduate and professional students called the Graduate PLUS loan.”

Historically, Grad PLUS loans allowed students to cover any remaining costs beyond the unsubsidized loan limits, ensuring full access to federal education funding. Without it, many healthcare students may need to rely on personal savings, institutional aid, or private student loans to bridge funding gaps.

Together, these changes mark a major shift in how healthcare professionals in training will pay for graduate and professional programs. As tuition continues to rise across medical, nursing, and allied health fields, the new federal limits could have far-reaching implications for affordability, debt levels, and access to education, particularly for students from lower-income backgrounds.

Jill Desjean serves as the director of policy analysis at the National Association of Student Financial Aid Administrators (NASFAA), where she helps translate federal student aid laws and regulations into practical guidance for financial aid professionals nationwide. She collaborates closely with NASFAA members to shape policy recommendations and regularly engages with lawmakers and regulators to provide insight on proposed legislation and rulemaking.

Before joining NASFAA in 2016, Desjean spent two decades working directly in higher education financial aid offices. Her career included positions at Tufts University School of Medicine, MIT, Brandeis University, the College of the Holy Cross in Massachusetts, and The New School in New York City. She holds a bachelor’s degree from the College of the Holy Cross.

One of the most confusing aspects of the 2026 student loan changes is how the federal government now distinguishes between “graduate” and “professional” students, a distinction that previously had little real-world impact.

“Congress actually pointed to an existing regulatory definition of professional students that has been around in Department of Education regulations for a long time,” Desjean explained. “But it was never intended to be about student loan limits. It was really about distinguishing students for statistical and reporting purposes.”

Under that longstanding definition, professional students include those pursuing certain terminal or practice-based degrees: “Professional students include medical professionals at the doctoral level, MDs, doctors of optometry, podiatry, chiropractic, as well as attorneys with JDs and some theology programs, like the master of divinity,” Desjean said. These are now the students eligible for the higher $50,000 annual borrowing limit under the Direct Unsubsidized Loan Program, effective 2026.

Many healthcare fields people commonly think of as “professional” still fall under the graduate student category. “Things like physical therapists, occupational therapists, and nurses are all classified as graduate students,” Desjean noted. “Basically, anything else that’s always been classified as ‘graduate’ continues to be classified as ‘graduate.’” This means those students remain subject to the lower $20,500 annual borrowing cap.

Desjean stressed that the classification change is purely financial—not a reflection of the importance or complexity of different healthcare roles. “It’s not a judgment on the type of work people are doing,” she said. “It is strictly about how much people should be allowed to borrow to get that credential.” What was once a technical reporting distinction now directly impacts how healthcare professionals in training can fund their education.

According to Desjean, the changes largely stem from a philosophical shift in Congress’s view of the federal government’s role in financing graduate and professional education: “The big thing was an overall sentiment from Congress that the federal government shouldn’t have as big a role as it has had in financing graduate and professional education,” she said.

Lawmakers cited the high debt loads among these students and noted that graduate and professional borrowers benefit significantly from programs such as Public Service Loan Forgiveness and income-driven repayment plans. Still, Desjean noted that these are not populations that typically default. “These are students who borrow a lot, but they do pay their loans back,” she explained.

“They felt that if these programs are really leading to well-paying degrees, then the private loan market should be wide open to individuals seeking those educational programs,” Desjean also notes. In the view of the bill’s drafters, the federal government no longer has a place in graduate and professional education to the extent it did with the Graduate PLUS loan program, which had allowed students to cover the full cost of attendance through federal aid.

Looking ahead, Desjean expects significant growth in private student loans to fill the funding gap left by the elimination of the Grad PLUS program. “There is no doubt that graduate and professional education is expensive, and most people are not in a position to just write a check,” she said, noting that many programs are full-time and leave little room for students to work while covering both tuition and living expenses.

However, she also expressed concern about who may be left behind. Some students may not qualify for private loans, which could limit access to advanced education, particularly for those from lower-income backgrounds or entering lower-paying healthcare fields. “The Grad PLUS loan really leveled the playing field,” Desjean said. “I worry about the long-term impacts on who is able to access graduate and professional education, especially in fields where diversity and representation really matter.”

Desjean cautioned that moving more graduate and professional students into the private loan market will make financing education both harder to access and potentially more expensive: “Private loans are going to have a credit score associated with them,” she said.

Students with imperfect credit histories may need a cosigner, which is not an option for everyone. “Someone who comes from a lower-income background probably doesn’t have parents or siblings in a financial position to cosign either,” she explained. “The worst-case scenario is that there’s a private lender willing to lend to someone with not great credit and no cosigner, but the terms of the loan are not good.”

She also emphasized the loss of built-in protections that come with federal student loans, particularly for students entering lower-paying healthcare or public service fields: “The great thing with federal student loans is the protections, especially income-driven repayment,” Desjean said. Under the federal system, borrowers can make payments based on their income and may qualify for Public Service Loan Forgiveness, reducing the financial risk of pursuing essential but lower-paying careers.

Without those safeguards, Desjean is concerned about both access to education and the long-term financial consequences for borrowers. Some students may be unable to secure loans at all, while others may take on expensive private debt that becomes unmanageable after graduation. “Access isn’t great if it’s through a very expensive private loan that doesn’t have any borrower protections,” she said. “That could put people in a really bad position down the road when they’re working and realizing they can’t afford the debt they took on to get into that field.”

While it is still too early to know exactly how the new loan structure will play out, Desjean expressed concern that limiting access to affordable financing could shape who can enter certain professions. “Representation really matters,” she said, noting that in many fields, it is not just about having enough workers, but about ensuring the people providing services reflect the communities they serve. Patients, students, and clients are often more likely to seek care or support from professionals who share similar backgrounds or life experiences.

“If you’re limiting the entry-point to a field to a certain subset of people, or really just leaving out a certain subset of people, they’re not going to be represented in the field,” Desjean explained. Over time, this could lead to shifts in professions such as healthcare, education, and social services, not necessarily through widespread shortages, but through a loss of diversity. She worries that reduced access to graduate and professional education could mean fewer professionals from lower-income backgrounds entering these critical fields, reshaping the workforce in ways that may have lasting consequences.

Desjean said much of the reaction to the 2026 student loan changes has been marked by apprehension, largely because the new rules are being implemented so quickly. “Congress passed this law last July, and it’s effective this coming July. It’s a really short ramp to implementation,” she explained.

The compressed timeline has contributed to confusion and misinformation, particularly around the professional student designation. Some borrowers initially felt offended, interpreting it as a statement about the value of their careers. “People whose jobs are clearly professional jobs took issue with, ‘Congress doesn’t think I’m a professional,’” Desjean said.

Over time, many have come to understand that the distinction is not about job titles, but about how much students are allowed to borrow to earn certain credentials.

While the law itself is moving forward, Desjean emphasized that there are still ways for students, educators, and healthcare professionals to make their voices heard. The Department of Education is drafting new regulations, which will be released for public comment after review by the Office of Management and Budget. Once published in the Federal Register, anyone with a personal stake in the changes can submit feedback. “That’s what the public comment period is for,” Desjean said. “Say what’s on your mind, and the Department of Education has to read it and consider it.”

However, she also noted that the most significant elements of the policy, including eliminating the Graduate PLUS loan program and separating graduate and professional borrowing limits, were set by Congress. This means that long-term or substantive changes would require legislative action.

For those concerned about the broader direction of federal student lending, Desjean encouraged reaching out to elected officials to advocate for reforms. Together, public comments and congressional engagement are the primary avenues to influence how these student loan changes unfold in the years ahead.